INTERNATIONAL  BUSINESS  LIBRARY 


TRAFFIC 

INTERSTATE   COMMERCE   AND 
TRANSPORTATION 


BY 


WILLIAM  J.  JACKMAN,  A.  B. 


Author  of  *' Corporations:  Organization,  Finance  and  Management"; 
formerly  Managing  Editor  of  the  Chicago  Journal. 


WasbioS*J|J'^''titut 


Chicago 


COPYRIGHT  1916  BY 

WHITMAN  PUBLISHING  CO. 

RACINE    -     CHICAGO 


-r^r 


^3 


"When  one  considers  the  immense  importance  of  rail- 
way transportation  to  the  hfe  of  every  community — 
indeed,  of  every  individual — it  is  not  to  be  wondered  at 
that  every  one  feels  privileged  to  take  a  hand  in  the  man- 
agement of  the  railways.  Our  whole  scheme  of  civihza- 
tion  today  is  dependent  upon  good  and  cheap  transporta- 
tion. The  food  upon  our  table  is  supplied  from  immense 
distances,  and  the  same  is  true  of  all  our  daily  needs." — 
Frederic  A,  Delano,  President  Wabash  Railroad. 


urrv^ms 


ASSOCIATE  EDITORS. 

Richard  Canning,  President  Northwestern  Finance  Campany,  Minne- 
apolis, Minn. 

H.  M.  Coombs,  special  lecturer  on  Credits  and  Collections,  International 
Law  and  Business  Institute. 

James  J.  Cbaig,  LL.  D.,  special  lecturer  on  Insurance,  International 
Law  and  Business  Institute. 

C.  A.  ECKLUND,  special  lecturer  on  Accounting  and  Auditing  and  Finan- 
cial Management,  International  Law  and  Business  Institute. 

W.  J.  Jackman,  A.B.,  former  managing  editor  of  Chicago  Evening 
Journal,  Sunday  editor  of  The  Inter  Ocean,  etc. 

G.  A.  Obth,  adjuster.  Travelers'  Insurance  Co. 

C.  N.  Smith,  special  lecturer  on  Business  Systems,  International  Law 
and  Business  Institute. 

J.  T.  Thompson,  formerly  of  the  Ontario  bar. 

A.  C.  Wilkinson,  special  lecturer  on  Salesmanship  and  Advertising, 
International  Law  and  Business  Institute. 

Geobge  E.  Young,  of  the  Minnesota  bar,  special  lecturer  on  Commercial 
Law  and  Corporations,  International  Law  and  Business  Institute. 

C.  £.  ZIMMESMAN,  «xptrt  on  Publicity  and  Sales  Promotion,  Chicago. 


AUTHORITIES  CONSULTED. 

Hebbebt  Knox  Smith,  U.  S.  Commissioner  of  Corporations. 

Charles  Nagel,  Secretary  of  Department  of  Commerce  and  Labor. 

E.  P.  Ripley,  President  Atchison,  Topeka  &  Santa  Fe  Railway  System. 

W.  H.  Tbuesdale,  President  Delaware,  Lackawanna  &  Western  Railroad 
Company. 

L.  D.  Smith,  Vice-President  Lehigh  Valley  Railroad  Company. 

W.  H.  Canniff,  President  New  York,  Chicago  &  St.  Louis  Railroad 
Company. 

J.  W.  Lee,  Jr.,  Pennsylvania  Railroad  Company. 

J.  Kbuttschnitt,  Director  of  Maintenance  and  Operation,  Union  Pacific 
Railroad  Company. 

W.  C.  Brown,  President  New  York  Central  Lines. 

W.  L.  Park,  Viw-President  and  General  Manager,  lUineis  Central  Rail- 
road Ccmpasy. 

4 


AUTHORITIES     CONSULTED.  8 

W.  H.  Williams,  Third  Vice-President  Delaware  &  Hudson  Company. 

Luis  Jackson,  Industrial  Commissioner,  Erie  Railroad. 

Paul  Morton,  formerly  Vice-President  of  the  Atchison,  Topeka  &  Santa 
Fe  E-ailroad. 

Geoege  B.  Coubtelyou,  former  Secretary  of  the  Treasury,  Washing- 
ton, D.  C. 

Frederic  A.  Delano,  President  Wabash  Railroad. 

Thomas  D.  O'Brien,  Associate  Justice  of  the  Suprem*  Court  of  Minne- 
sota. 

E.  S.  Conway,  Chairman  of  Deep  Waterway  Committee  of  Chicago 
Commercial  Association. 

Charles  M.  Hays,  President  Grand  Trimk  Railway  System. 

L.  E.  Johnson,  President  Norfolk  &  Western  Railroad  Company. 

George  Gerard  Tunell,  of  the  U.  S.  Railway  Mail  Service. 

J.  L.  Payne,  Comptroller  Department  of  Railways  and  Canals,  Canada. 

R.  RosE\"EAR,  former  Accountant  Pacific  Express  Company,  Chicago. 

Emory  R.  Johnson,  Assistant  Professor  of  Transportation  and  Com- 
merce, University  of  Pennsylvania,  and  author  of  "American  Railway 
Transportation." 

Walker  D.  Hines,  Attomey-at-Law,  Pittsburgh,  Pa. 

Prof.  Henry  C.  Adams,  Statistician  Interstate  Commerc«  Commission. 

0.  P.  Austin,  Chief  of  Bureau  of  Statistics,  Department  of  Commerce 
and  Labor. 

Joseph  A.  Arnold,  Editor  and  Chief  of  Division  of  Publications,  U.  S. 
Department  of  Agriculture. 

W.  J.  Ashley,  M.  A.,  professor  of  Economic  History  in  Harvard  Uni- 
versity; author  of  "An  Introduction  to  English  Economic  History  and 
Theory." 

Right  Honorable  James  Bbyce,  British  Ambassador  to  the  United 
States;  author  of  "The  American  Commonwealth." 

Andrew  Carnegie,  author  of  "The  Empire  of  Business,"  "The  Gospel 
of  Wealth,"  "Triumphant  Democracy,"  etc.,  etc. 

A.  Hamilton  Church,  author  of  "The  Proper  Distribution  of  Expense 
Burden." 

Dr.  Stuart  Daggett,  University  of  California,  author  of  "Railroad 
Reorganization." 

E.  Dana  Durand,  Director  of  the  Census  Bureau,  Washington,  D.  C. 

Seymour  Eaton,  Director  of  the  Department  of  Industry  and  Finance, 
Drexel  Institute,  Philadelphia;  author  of  "How  To  Do  Business." 

James  H.  Eckels,  former  Comptroller  of  the  Currency;  author  of  **Th« 
Methods  of  Banking,"  etc. 

David  R.  Forqan,  President  of  the  National  City  Bank  of  Chicago. 

H.  L.  Gantt,  member  of  the  American  Society  of  Mechanical  Engineers; 
author  of  "Training  Workmen  in  Habits  of  Industry  and  Co-operation," 
etc.,  etc. 


6  AUTHORITIES     CONSULTED. 

Alexander  Dana  Notes,  financial  editor  "New  York  Evening  Post." 

Adam  Smith,  LL.  D.,  author  of  "The  Wealth  of  Nations." 

Hon.  John  Wanamakeb,  Philadelphia. 

Habeington  Emebson,  author  of  "Efficiency  as  a  Basis  for  Operation 
and  Wages." 

Hon.  W.  L.  Mackenzie  King,  C.M.G.,  M.P.,  Minister  of  Labor,  Do 
minion  of  Canada. 

Edwin  E.  A.  Seligman,  Uj.  D.,  author  of  "Essays  in  Taxation,"  "The 
Economic  Interpretation  of  History,"  "Principles  of  Economics,"  etc.,  etc. 
Hon.  J.  P.  B.  Casgrain,  Quebec,  Canada ;  author  of  "The  Problems  of 
Transportation  in  Canada." 


TRANSPORTATION 

INTERSTATE   COMMERCE 

FOREIGN  TRADE 


TABLE  OP  CONTENTS. 


PAGE 

Associate  Editors   and  Authorities   Consulted 4 

Introduction    15 

Chapter  I.  The  History  of  Transportation 21 

Original  Suggestor  of  Kailroads — What 
Fulton  and  Gray  Did — First  Railway  in 
America — Start  of  New  York  Central 
Lines — Features  of  Primitive  Railroad- 
ing— Early  American  Locomotives — Pri- 
mary Purposes  of  Railways — ^What  Rail- 
ways Have  Done — ^Birth  of  Trans- Conti- 
nental Route. 

Chapter  II.  Organization  op  Operating  Force 39 

Organization  of  Union  Pacific — Duties  of 
General  Superintendent  and  Other  Offi- 
cers— ^What  Division  Superintendents  Do — 
Routine  of  Railway  "Work — Duties  of  Gen- 
eral Freight  Agents— Duties  of  General 
Passenger  Agent — Various  Other  Depart- 
ments. 

Chapter         III.  Relations  of  Carrier  and  Shipper 47 

Liabilities  of  Railroads — ^When  Railroads 
Are  Exempt — ^What  Railway  Carriers  Must 
Do — ^Loss  Arising  from  Fire — Law  of 
Principal  and  Agent — How  the  Modem 
Plan  Works — Responsibilities  of  Shippers 
— ^Two   Extremes  of  Liability — Responsi- 

9 


10  TABLE    OF    CONTENTS. 

bility  of  Carriers  by  Water — ^Liability  of 
Vessel  Owners  Limited — ^Liability  for  Im- 
proper Handling. 

Chapter        IV.  Making  Rates  and  Fares 57 

Importance  of  Freight  Rates — Freight 
Classification  —  Commodity  Tariffs  — 
Rate-Making  Officials  —  Making  Local 
Freight  Rates — Competitive  and  Through 
,     Rates — The  Percentage  Tariff  System. 

Chapter  V.  Domestic  and  Foreign  Rates 69 

Rates  on  the  Pioneer  Roads — Rates  Now  in 
Effect  on  Domestic  and  Foreign  Roads — 
Lower  in  the  United  States  Than  in  Any 
Other  Civilized  Country — Freight  Rates 
Also  Lower  and  Steadily  Decreasing — 
"What  a  Ten  Percent  Increase  Would  Mean. 

Chapter         VI.  Classification  of  Traffic 77 

Why  Classification  is  Made — How  Dis- 
crimination is  Avoided — Proper  Classifica- 
tion a  Hard  Problem — ^Locality  a  Ruling 
Factor — Division  of  Freight  Into  Classes — 
Illustration  of  the  System — Deciding  On 
Minimum  Capacity — ^What  Classification 
Does. 

Chapter       VII.  Uniform  Bill  of  Lading 85 

First  of  the  Uniform  Bill — Great  Advan- 
tage to  Shipper — ^Trouble  With  Old  Form 
— Features  of  the  Uniform  Bill — Advan- 
tages in  Banking  Deals — Conditions  of 
Modern  Bill — How  Shippers  Are  Able  to 
Raise  Money — Security  Afforded  to  Bank- 
ers— Milled-in-Transit  and  Other  Forms 
of  Bills  of  Lading. 

Chapter      VIII.  Private  Cars  and  Fast  Freights 97 

Rates  on  Private  Car  Shipments — Evil  of 
Car  Detention — New  Per  Diem  Rate — Pri- 


TABLE    OF    CONTENTS.  ll* 

vate  Cars  Not  Detained — One  Source  of 
Abuse — The  One  Great  Advantage — Origin 
of  the  Private  Car — First  of  Fast  Freight 
Lines-. 

Chapter         IX.  Some  Transportation  Problems 105 

Eates  Should  Be  Stable — Pooling  and  Anti- 
Pooling — Effects  of  Keen  Competition — 
Benefits  of  Combination  System — Three 
Possible  Eelief  Plans — Danger  of  Unbri- 
dled Discrimination — ^To  Preserve  Reason- 
able Eates — Unification  of  Eailway  Inter- 
ests. 

Chapter  X.  Eailways  as  Industrial  Factors 115 

Start  of  American  Manufactures — Eail- 
way Factor  in  Development — Education  of 
a  Foreigner — How  Eailways  Became  Inter- 
ested— Pushing  the  Eails  Westward — Work 
of  Immigration  Bureaus — Peopling  the 
Western  Country — A  Work  of  Self-inter- 
est— Why  Factories  Are  Encouraged. 

Chapter         XI.  Training  of  Eailway  Mechanics 131 

Benefits  of  the  System — Graduates  Get 
Good  Positions — Outline  of  Curriculum — 
How  Boys  Are  Eewarded — Prizes  for  Best 
Work — Method  of  Apprenticeship — Exam- 
ination of  Applicants — Advantage  of  In- 
denture   System . 

Chapter       XII,  Eailway  Situation  in  Canada 143 

Liberal  Grants  of  Land  to  Canadian  Eoads 
— Present  Policies  of  Government — Total 
of  Eailway  Construction — ^Total  Capital 
and  Average  Per  Mile — Business  Done  in 
1915— Gross  and  Net  Earnings — Compara- 
tive Wages  of  Employes. 


12  TABLE    OF    CONTENTS. 

Chapter      XIII.  Eailway  Mail  Service 155 

Eailways  at  First  Unreliable — ^Two  Early 
Speed  Contests — ^When  Horse  Defeated  En- 
gine— First  of  Special  Mail  Service — First 
of  Eeal  Mail  Service — Old  System  of  Han- 
dling Mail — ^The  Distributing  Of&ce  Sys- 
tem— ^Abuses  In  the  Old  System — ^The 
Work  of  Reform  Begun — Eailway  Post- 
oflBces  Suggested — Start  of  the  Present 
System — ^The   First   Eailway   Postoffice. 

Chapter       XIV.  Transportation   by   Express 175 

Origin  of  the  Express  Business — First  of 
Large  Companies — General  Terms  of  Con- 
tracts With  Eailroads — Main  Source  of 
Eevenue — Charges  Based  on  Eisk  Taken — 
Eesponsibility  of  Express  Forwarder — Im- 
portance of  C.  0.  D.  Business — Money  Or- 
ders. 

Chapter        XV.  Eailway  Crop  Eeport  Bureaus 187 

System  of  Union  Pacific  Eeports — How  the 
Territory  is  Covered — Nature  and  Method 
of  Compiling  the  Eeports — Purpose  of  Col- 
lecting the  Information — General  Scope  of 
the  News — People  Who  Are  Benefited  by 
the  Service. 

Chapter      XVI.  Fixing  Value  of  Eailroads 195 

Location  of  Eoute  Important — Effect  of 
Values  on  Investors — What  Is  Fair  Valua- 
tion?— ^Views  of  Federal  Expert — Sweep- 
ing Decision  by  Federal  Court — Items  to 
Be  Considered  in  Fixing  Valuation. 

Chapter     XVII.  Interstate  Commerce  Act 215 

Federal  Legislation  on  Eates — Provisions 
of  Long  and  Short  Haul — Penalties  for 
Discrimination — Carriers  Liable  for  Dam- 
ages— Punishment  of   Offenders — Author- 


TABLE    OF    CONTENTS.  13 

ity  of  Interstate  Commission — Jurisdiction 
of  Courts — Summary  of  Decisions. 

Chapter  XYIII.  Transportation  by  Water 271 

OflBcial  Figures  of  Passenger  Traffic — 
Movement  of  Freight  Traffic — Mileage  of 
Available  Eoutes — Defects  of  Present  Sys- 
tem— Character  of  Vessels  Engaged — 
Policy  of  Federal  Improvement — Ship- 
ping Contracts  and  Documents — Char- 
ters and  Bills  of  Lading — Manifests  and 
Government  Regulation — What  Constitutes 
Navigable  Water. 

Chapter      XIX.  Lakes-to-the-Gulp  Waterway 309 

Why  a  Waterway  Is  Needed — Prpduction 
of  Middle  West — Great  Growth  of  Manu- 
factures— ^Lack  of  Transportation  Facili- 
ties— Heavy  Tax  Upon  Producers — ^Water 
Transportation  Cheapest  —  Competition 
Brings  More  Business — Division  of  Rail- 
Water  Rates — How  the  Producer  Is  Af- 
fected 

Chapter        XX.  Vessels  in  Foreign  Trade 327 

System  of  Federal  Control — Importance 
of  Ship's  Papers — ^Vessels  Entitled  to  Reg- 
istry— Protection  Afforded  by  Registry — 
How  Vessels  Are  Identified — ^The  '^Hus- 
band'' of  a  Vessel — Method  of  Ascertaining 
Tonnage — Reason  for  Exact  Measure- 
ments. 

Chapter      XXI.  Work  of  the  Custom  House 337 

How  Vessels  Make  Clearance — The  Ship's 
Manifest — Routine  of  Importing  Dutiable 
Goods  —  Unloading  Rules  —  Passing 
Through  the  Custom  House — Entry  for 
Warehouse — ^Penalties  for  Fraud. 


14  TABLE    OF    CONTENTS. 

PAGE 
Chapter  XXII.    The  Bonded  Warehouse 347 

Scope  of  Bonded  Warehouse — Making  En- 
try of  Goods — Punishment  for  Wrong 
Valuation — Handling  Goods  for  Ee-expor- 
tation. 

Chapter  XXIII.  Electric  Railways  in  the  U.  S 353 

Rapid  Development  of  Electric  Sys- 
tems— Possibilities  of  Electricity — 
Steam  Railroad  Electrification  Com- 
ing— Classes  of  Electric  Railway  Serv- 
ice and  Equipment. 

Chapter  XXIV.  Transportation  by  Automobile 371 

Growing  Use  of  Motor  Vehicles  in 
Transportation  of  Passengers  and 
Freight. 

Questions  for  Review 385 

Terms  Used  in  Transportation 407 


INTRODUCTION. 

There  is  no  one  field  of  modern  endeavor  which  af- 
fects so  many  people,  directly  and  indirectly,  as  trans- 
portation. There  is  no  other  single  branch  of  human 
effort — no  one  combination  of  capital  and  labor — 
which  has  such  a  vitally  important  bearing  on  the  wel- 
fare of  the  civilized  world. 

In  1915  the  railways  of  the  United  States  employed 
in  various  capacities  the  enormous  army  of  1,848,883 
men,  to  whom  was  paid  $2,915,000,000  in  salaries  and 
wages.  Similar  statistics  for  the  water  lines  of  trans- 
portation, if  obtainable,  would  increase  these  figures 
very  materially.  Some  idea  of  the  inmiensity  of  this 
force  of  employees  engaged  in  rail  transportation  work 
alone  may  be  had  by  comparison  with  the  numerical 
strength  of  the  Northern  army  engaged  in  the  Civil 
War  of  1861-1865.  The  total  number  was  2,656,053. 
But  these  were  not  all  in  service  at  once.  The  figures 
represent  the  total  number  of  men  enlisted  or  drafted 
during  the  entire  four  years  of  warfare.  It  is  safe  to 
say  that  the  nearly  2,000,000  human  beings  engaged 
in  railway  operation  in  1915  constituted  a  much  larger 
army  than  was  ever  marshaled  at  one  time  in  the  history 
of  the  world. 

Transportation  facihties,  or  the  lack  of  them,  espe- 
cially those  afforded  by  railways,  make  and  unmake 
communities.  Wherever  the  railway  penetrates  pros- 
perous villages  spring  up,  and  the  terminal  and  divi- 

15 


16  INTRODUCTION. 

sion  headquarters  assume  importance  in  the  business 
world.  The  money  distributed  in  the  form  of  salaries 
and  wages  is  the  very  life  blood  of  trade.  It  would  be 
difficult  to  trace  this  distribution  through  its  various 
channels,  but  the  rent,  food,  fuel  and  clothing  expenses 
of  a  million  and  a  half  of  men  and  their  dependents  con- 
stitute an  important  factor  in  the  commercial  prosperity 
of  the  country. 

Assuming  the  low  ratio  of  three  dependents  to  one 
worker  as  the  proper  average,  we  have  the  enormous 
number  of  5,500,000  people  obtaining  a  livelihood  di- 
rectly from  transportation  lines.  This  would  make  a  city 
larger  than  Greater  New  York.  If  it  were  possible  to 
effect  an  even  distribution  of  the  $2,915,000,000  of  wage 
money,  it  would  give  every  one  of  the  5,500,000  people 
an  average  annual  income  of  approximately  $500,  while 
three-quarters  of  them  would  contribute  in  no  way 
toward  the  earning  of  the  money,  aside  from  the  possible 
performance  of  household  services. 

Astounding  as  these  figures  are,  it  is  in  the  develop- 
ment of  communities  that  transportation  becomes  of 
transcendent  importance.  There  is  no  way  of  tabulat- 
ing the  results  obtained  in  a  manner  which  will  show  the 
actual  money  value  accruing  to  each  community  thus 
benefited.  The  best  that  can  be  done  is  to  show  the  gen- 
eral advancement  in  population  and  wealth. 

In  the  ten  years  between  1900  and  1910  the  popula- 
tion of  the  United  States  increased  from  76,303,387  in 
1900  to  93,402,151.  The  ratio  of  increase  for  the 
few  years  ending  in  1915  has  been  equally  great,  and 
allowing  it  to  be  the  same,  we  have  now  a  population 
of  approximately  100,000,000.     With  this  increase  in 


INTRODUCTION.  17 

population  has  naturally  come  an  increase  in  wealth. 
The  total  true  value  of  property  in  1915  was  $187,739,- 
000,000. 

Population  follows  the  lines  of  least  resistance.  It 
nat'JTally  seeks  an  outlet  where  means  of  transportation 
r-re.tne  best  and  most  available.  Where  there  are  no 
adequate  means  of  transportation  the  population  will  be 
sparse — in  civilized  countries  at  least.  In  the  wake  of 
population  comes  wealth.  This  may  not  be  true  as  to 
sucfi' countries  as  China  and  India,  but  it  does  apply 
with  full  force  to  enhghtened  countries  hke  the  United 
States  and  Canada,  where  the  great  bulk  of  the  people 
are  producers,  or  wealth  makers. 

What  influence  has  made  a  city  of  2,500,000  people 
(Chicago)  out  of  what  was  eighty  years  before  a  mere 
frontier  trading  post?  Chicago  did  not  really  begin  to 
grow  until  it  got  adequate  transportation  facilities. 
There  was  some  growth,  of  course,  but  it  was  slow  and 
desultory.  It  was  not  until  the  "iron  horse"  began  to 
snort  its  way  into  town  that  Chicago  really  commenced 
to  expand  and  assume  a  metropolitan  importance.  The 
railway  brought  people,  and  the  people,  in  turn,  estab- 
lished industries.  The  railway  again  made  an  outlet  for 
the  products  of  these  industries.  Finally  the  size  of  the 
traffic  attracted  other  railroads  and  the  process  was  re- 
peated, growing  in  size  and  importance  with  each  new 
avenue  of  transportation.  It  is  in  this  way  that  every 
large  community  in  the  United  States  has  been  built  up. 

No  accurate  study  of  economics  in  this,  or  any  other 
civilized  country,  can  be  made  without  a  clear  under- 
standing of  the  part  necessarily  occupied  by  transporta- 
tion facilities.  While  population  might  possibly  increase 

f.B.L.     Vol.  8—2 


18  INTRODUCTION. 

without  modern  means  of  transportation — but  even  this 
is  doubtful — there  would  be  no  outlet  for  surplus  prod- 
ucts, and  consequently  no  inducement  for  their  produc- 
tion. Each  community  would  exist  upon  and  within 
itself  and  there  would  be  no  interchange  of  the  results 
of  labor,  no  bartering  of  goods  for  money. 

The  operation  of  transportation  lines  offers  to  young 
men  of  industry  and  ability  a  field  of  certain  and  profit- 
able occupation.  The  man  who  will  start  in  a  modest 
position,  master  the  details  of  each  task  as  it  comes  to 
him,  and  show  by  his  actions  that  he  is  master  of  his 
work,  is  sure  to  attract  the  attention  of  his  superiors  and 
be  called  up  higher.  Contrary  to  general  belief,  there 
is  no  business  or  profession  in  which  there  is  less  favorit- 
ism shown  than  railroading.  In  more  than  one  instance 
railroad  presidents  began  their  apprenticeships  as  track 
workmen,  and,  while  every  competent  track  workman 
can  not  reasonably  expect  to  become  a  railway  presi- 
dent, such  attainment  is  not  impossible,  and  the  number 
who  have  become  division  and  general  superintendents 
is  surprisingly  large. 

Clerks  in  railway  ofiices,  the  hard-working  men  who 
juggle  with  tariff  sheets  and  keep  the  books,  attract 
little  attention,  and  their  advancement  is  slow  and  lim- 
ited. It  is  the  men  who  make  possible  the  moving  of 
freight  and  passengers  who  draw  upon  themselves  the 
compliments  of  their  superior  officers  and,  on  doing  a 
good  piece  of  work,  are  invited  to  take  a  better  j  ob.  The 
clerical  force  is  essential  to  the  welfare  of  a  railroad,  but 
its  members  are  not  so  much  in  the  limelight.  One 
successful  railway  operator  summed  up  the  situation 
as  follows: 


INTRODUCTION.  19 

"We  are  overwhelmed  with  applications  from  men 
who  want  to  keep  books  or  make  out  freight  bills. 
Wages  are  low  and  advancement  very  slow  up  to  a  cer- 
tain point,  where  it  stops  entirely.  Brainy  men,  willing 
to  do  rough,  hard  work,  are  scarce,  and  a  competent  man 
doesn't  work  long  in  a  position  of  this  kind  before  he  is 
found  out  and  promoted." 

While  not  absolutely  essential,  a  knowledge  of  teleg- 
raphy is  of  great  value  to  an  operating  official,  and  a 
pronounced  aid  to  advancement.  A  bright,  hard- 
working station  agent  who  understands  telegraphy,  or  a 
brainy  track  walker  or  section  foreman  who  knows  how 
to  pull  his  road  out  of  an  emergency,  will  come  to  the 
front  fast;  the  clerk  in  the  general  office  will  work  out 
his  life  as  an  underhng. 


'Maximum*'  Locomotive — American  Locomotive  Co.,  N.  Y. 


CHAPTER  I. 
THE  HISTORY  OF  TRANSPORTATION. 

Transportation,  in  some  form,  has  ever  been  one  of 
the  necessities  of  the  hmnan  race.  Primitive  man  met 
his  needs  in  this  line  by  the  use  of  his  fellow  men  as 
pack  carriers,  and  in  some  parts  of  the  world,  notably 
the  jungle  regions  of  Africa,  this  method  is  still  in 
vogue.  From  the  human  pack  carrier  there  has  been 
a  gradual  evolution,  through  animal  pack-carriers  and 
beasts  of  burden,  stage  coaches,  boats  and  other  con- 
veyances, which  has  had  its  development  in  the  modern 
railroad  with  its  palace  cars  and  luxurious  sleepers,  and 
the  monster  steamers  of  the  lakes  and  oceans. 

Nor  should  the  automobile  be  overlooked  when  mod- 
ern methods  of  transportation  are  under  consideration. 
It  is  in  practical  use  as  a  means  of  carrying  both  pas- 
sengers and  freight  and,  in  its  field  is  fully  as  important 
a  factor  in  the  world  of  transportation  as  the  railway 
or  the  steamship. 

Civilization  Follows  Transportation. 

Civihzation  follows  modern  methods  of  transporta- 
tion. Where  primitive  methods  of  freight  and  pas- 
senger traffic  are  still  in  vogue  we  find  the  progress  of 
civilization  slow,  and  frequently  at  a  standstill.  Where- 
ever  there  is  adequate  modern  transportation  there  we 
will  find  the  greatest  intellectual  and  commercial  pros- 

21 


22  THE   HISTORY   OF   TRANSPORTATION. 

perity,  thriving  and  advancing  communities,  and  happy 
peoples. 

It  would  be  unfair  to  attribute  all  of  this  develop- 
ment to  the  railways,  as  water  craft  have  had  their  full 
share  in  it  and  in  many  sections  of  the  country  are  in- 
dispensable, but  it  has  become  a  custom  to  consider  the 
railways  as  first  in  the  order  of  importance. 

Developments  of  Sixty  Years. 

In  1915  there  were  251,984  miles  of  railway  in  the 
United  States,  and  30,000  in  Canada,  a  total  of  281,984 
miles.  It  seems  incredible  that  this  is  the  result  of  only 
seventy  years  of  effort;  in  reality  of  less  than  sixty 
years.  In  1820  railways  were  unknown,  as  were  boats 
propelled  by  other  than  sail  power  or  oars. 

It  was  in  1820  that  the  idea  of  what  has  since  become 
the  modern  railway  was  first  suggested- — an  iron  road- 
bed of  ties  and  rails  on  which  might  be  hauled,  by  some 
means,  passengers  and  freight.  The  suggestion  was 
laughed  to  scorn,  the  idea  was  denounced  by  the  most 
learned  and  influential  men  of  the  day  as  preposterous. 
And  yet  there  are  people  living  today  who  were  bom 
in  that  year. 

First  Suggestor  of  Railroad. 

Thomas  Gray,  a  native  of  Leeds,  England,  and  real 
originator  of  our  railway  system,  was  the  first  man  to 
suggest  the  construction  of  a  railroad.  Gray,  who  was 
born  about  1780,  began  to  write  and  talk  on  this  topic 
in  1820.  The  popular  verdict  was  that  he  was  insane. 
He  called  his  project  "A  general  iron  railway."  He 
petitioned  Parliament,  sought  interviews  with  the  lords 


THE   HISTOEY   OF   TRANSPOETATION.  28 

and  other  great  men,  and  became  the  laughing-stock 
of  all  England.  All  transportation  was  then  done  by- 
stage  coaches  and  carters'  vans.  The  locomotive  en- 
gine was  unknown.  Gray  persevered,  and  finally 
Stephenson  took  up  the  idea  and  produced  an  engine 
which  made  Gray's  project  feasible.  But  Gray  did 
not  benefit  by  it.  What  ultimately  became  of  him  is 
unknown,  but  up  to  1846  he  had  been  neglected,  and 
was  forced  by  poverty  to  sell  glass  on  commission  for 
a  hving. 

Fulton  Treated  With  Rudeness. 

It  is  a  peculiar  coincidence  that  Robert  Fulton,  the 
pioneer  of  steamer  transportation,  was  treated  with  the 
same  contumely  when  he  was  trying  to  explain  to  the 
people  of  the  United  States  that  navigation  by  steam, 
propulsion  of  vessels  in  a  given  direction  regardless  of 
winds  or  tides,  was  possible.  The  people  would  have 
none  of  Fulton's  theories.  Neither  would  the  law- 
makers. When  he  solicited  permission  to  use  the  hall 
of  the  House  of  Representatives  for  the  purpose  of 
delivering  a  lecture  explanatory  of  his  theory  of  steam 
navigation,  he  was  rudely  repulsed  on  the  ground  that 
it  would  be  a  discussion  of  a  wildly  visionary  scheme. 

Fulton  began  his  experiments  and  studies  in  1793, 
but  it  was  not  until  1807  that  he  built  and  navigated 
successfully  the  steamer  Clermont,  on  the  Hudson 
River.  It  was  an  illustration  of  dogged  persistency  in 
overcoming  obstacles  that  would  have  discouraged  a 
less  resolute  man. 


24  THE    HISTORY   OF   TRANSPORTATION. 

What  Fulton  and  Gray  Did. 

These  ideas  of  Fulton  as  regards  steamers,  and  of 
Gray  as  regards  railways,  were  not  in  any  way  con- 
nec?ted  with  the  development  of  the  steam  engine  itself. 
These  men  sought  merely  an  application  of  steam  en- 
gine power  to  the  purposes  of  transportation.  Up  to 
the  time  the  possibihties  of  this  application  were  thus 
demonstrated,  the  steam  engine  had  been  merely  a 
stationary  force. 

As  a  matter  of  fact,  steam  engines  of  a  very  primi- 
tive design,  of  course,  were  known  as  early  as  130  B.  C. 
Hero,  of  Alexandria,  describes  one  of  these  machines 
in  his  Pneumatics,  It  was  called  the  aeolipile,  and  was 
a  sort  of  steam  reaction  turbine.  From  then  until  the 
seventeenth  century  there  was  little  improvement,  and 
it  was  not  until  James  Watt,  in  1763,  made  certain 
additions  and  improvements,  that  the  commercial  worth 
of  the  steam  engine  was  fully  established. 

First  Railway  in  America. 

Some  historians,  referring  to  what  is  called  the 
Granite  Quarry  Railway  at  Quincy,  Mass.,  give  1827 
as  the  date  of  the  construction  of  the  first  railway  in 
the  United  States.  This  is  an  error,  as  this  road  was 
not  what  may  properly  be  called  a  railway.  It  was 
a  tramway,  over  which  cars  were  hauled  part  of  the 
way  by  horses,  and  then  up  a  steep  incline  by  a  cable 
drawn  by  a  stationary  engine.  The  main  purpose  in 
the  construction  of  this  tramway  was  to  furnish  a  means 
of  transporting  stone  from  Quincy  to  Boston  for  the 
building  of  the  Bunker  Hill  monument. 


THE    HISTORY    OF   TRANSPORTATION.  25 

The  first  real  railway  in  the  United  States,  for  gen- 
eral transportation  purposes,  was  the  Baltimore  &  Ohio, 
construction  of  which  was  begun  in  1828,  and  this  was 
at  first  intended  to  be  operated  by  horses. 

England  First  in  the  Field. 

England  antedates  America  in  the  beginning  of 
actual  railway  construction  by  two  years,  the  building  of 
the  Liverpool-Manchester  line  being  started  in  1826. 
Up  to  this  time  no  satisfactory  locomotive  engine  had 


Transportation  of  Freight  in  1825. 

been  devised,  but  the  results  of  experiments  had  been 
such  as  to  warrant  the  belief  that  a  satisfactory  engine 
would  be  ready  by  the  time  the  roads  were  completed. 
This  proved  to  be  correct. 

Railway  construction  was  slow  in  those  days.  It 
was  three  years — in  1829 — ^before  the  Liverpool-Man- 
chester line  was  completed,  and  of  the  Baltimore  & 
Ohio,  begim  in  1828,  only  thirteen  miles  were  ready  for 
operation  in  1830.  Five  years  later  the  entire  length 
of  the  completed  road  was  only  135  miles. 

Results  of  Stephenson's  Ingenuity. 

In  the  meantime — 1829 — George  Stephenson  had 
become  the  "father  of  the  locomotive."     Utilizing  the 


26  THE   HISTORY   OF   TRANSPORTATION. 

principle  of  Watt,  he  succeeded  in  producing  a  loco- 
motive that  would  run  on  rails  and  draw  a  train  of 
loaded  cars.  A  trial  was  made  on  the  Liverpool-Man- 
chester line  in  October,  1829,  when  the  first  Stephen- 
son locomotive,  the  Rocket^  attained  a  speed  of  twenty 
miles  an  hour.  The  day  of  doubt  was  past — the  railway 
of  today  was  assured. 

Many  amusing  stories  are  toM  illustrative  of  Ste- 
phenson's grim  wit  and  the  obstacles  he  was  forced 
to  contend  with.  Even  after  he  had  demonstrated  the 
practicability  of  his  engine,  some  of  the  influential  men 
of  that  day  attempted  to  discourage  him.  One  of  them, 
a  lord,  said: 

"This  will  never  do,  Stephenson.  Your  engine  goes 
too  fast.     Suppose  a  cow  should  get  on  the  track?" 

"That  woo'  be  awkward  fo'  th'  coo,  mae  laird,"  re- 
plied Stephenson. 

Start  of  New  York  Central  Lines. 

Following  the  demonstration  of  the  practicability  of 
the  Stephenson  engine,  railway  projects  came  thick  and 
fast,  especially  in  this  country.  The  Charleston  and 
Hamburg  road,  a  South  Carolina  line,  had  137  miles 
constructed  in  1834,  and  was  for  some  time  the  longest 
and  most  important  line  under  one  management  in 
America.  The  Mohawk  &  Hudson,  parent  of  the  New 
York  Central  System,  was  begun  in  1830.  Numerous 
small  companies,  now  amalgamated  into  the  mammoth 
Central,  took  up  the  work  of  building  roads  between 
other  cities,  and  by  1842  there  was  a  system  of  rail 
communication  between  New  York  and  Buffalo  by  way 
of  Albany. 


THE    HISTORY   OF   TRANSPORTATION.  27 

Features  of  Primitive  Railroading. 

These  lines  were  not  operated  as  one  harmonious 
whole  as  they  are  at  present.  Each  company  was  sepa- 
rate and  distinct  from  the  rest.  It  ran  its  cars  over  its 
own  road  only,  and  the  passenger  who  wished  to  make 
the  journey  from  New  York  to  Buffalo  was  compelled 
to  change  cars  at  the  end  of  each  line.  Sleepers  and 
diners  were,  of  course,  unknown. 

Freight — ^there  was  comparatively  little  of  it  in  those 
days — was  handled  in  the  same  manner  as  passengers, 
a  transfer  from  one  car  to  another  being  made  at  the 
end  of  each  line.  Such  a  thing  as  sending  a  car  through 
to  the  destination  of  the  freight,  without  "breaking 
bulk,"  had  not  occurred  to  the  men  who  operated  the 
various  roads. 

Rapid  Development  of  Railways. 

Railway  development  in  other  States  was  also  rapid. 
Between  1830  and  1835  Pennsylvania  constructed  and 
operated  200  miles  of  road.  The  Columbia  Railroad, 
the  first  division  of  the  present  Pennsylvania  system, 
was  constructed  by  the  State,  and  by  1834  there  was 
railway  communication  between  Philadelphia  and  Pitts- 
burg. In  1837  the  Camden  &  Amboy  line,  connecting 
Philadelphia  with  New  York,  was  finished,  and  the 
same  year  also  saw  the  completion  of  the  Philadelphia, 
Wilmington  &  Baltimore  road.  The  Reading  was 
opened  in  1838. 

Massachusetts  was  the  next  active  State.  By  1835 
three  lines  connected  Boston  with  Providence,  Lowell 
and  Worcester,  and  in  1841,  what  is  now  known  as 


28 


THE    HISTORY    OF   TRANSPORTATION. 


the  Boston  &  Albany,  made  connection  with  the  lines 
for  New  York  and  Buffalo  at  Albany. 

Use  Home-Made  Locomotives. 

At  first  the  few  locomotives  in  use  were  imported 
from  England    but  this  policy  was  soon  abandoned. 


Locomotive  Built  by  Peter  Cooper  in  1830. 

The  foreign-made  engines  were  not  adapted  to  Ameri- 
can track  conditions,  and  were  also  too  expensive  and 
difficult  to  obtain.  Little  attention  was  paid  in  those 
days  to  grades  and  curves  by  American  railway 
builders.  The  only  desire  was  "to  get  there."  As  a 
consequence  the  roads  ran  up  hill  and  down  and  swung 
around  sharp  curves  in  reckless  manner.  The  "rails" 
were  often  but  little  more  than  iron  straps. 


THE    HISTORY   OF   TRANSPORTATION.  29 

Under  these  conditions,  aside  from  the  important 
economies  effected  in  time  and  money,  the  building  of 
railway  engines  adapted  to  home  needs  became  a  neces- 
sity in  America.  Out  of  this  has  grown  one  of  our 
greatest  industries.  In  one  year  the  N.  Y.  Central 
system  alone  paid  out  $31,000,000  for  new  engines  and 
car  equipment.  And  this  in  seventy  years  from  the 
time  when  people  were  doubtful  whether  the  expendi- 
ture of  $5,000  in  the  construction  and  equipment  of  an 
entire  road  would  be  a  paying  investment. 

Early  American  Locomotives. 

Some  of  the  early  American  locomotives  were  queer 
specimens  of  design  and  workmanship.  Peter  Cooper, 
who  made  a  fortune  in  glue,  and  later  gave  the  most 
of  it  away  in  educational  enterprises,  constructed  the 
"Tom  Thumb"  in  1830.  This  was  the  first  real,  prac- 
tical home-made  locomotive.  It  was  constructed  for 
use  on  the  Baltimore  &  Ohio,  in  the  financing  of  which 
road  Cooper  was  interested. 

The  "Tom  Thumb"  did  all— and  more— that  could 
be  expected  of  it.  Weighing  less  than  a  ton,  it  hauled 
a  load  of  four  and  one-half  tons  up  steep  grades,  over 
poor  tracks,  at  a  speed  of  from  12  to  15  miles  an  hour. 

Larger  engines  of  greater  power  and  more  substan- 
tial finish  were  turned  out  by  the  West  Point  Foundry 
Works,  and  by  Matthias  Baldwin,  of  Philadelphia,  the 
founder  of  the  great  plant  now  known  as  the  Baldwin 
Locomotive  Works.  Baldwin's  first  locomotive,  built 
in  1832,  was  called  "Old  Ironsides,"  and  was  used  on 
the  Columbia  road. 


30  THE   HISTORY   OF   TRANSPORTATION. 

Improvements  came  fast,  and  by  1836  Henry  R. 
Campbell  and  James  Brooks,  of  Philadelphia,  the  lat- 
ter the  founder  of  the  Brooks  Locomotive  Works,  had 
constructed  the  first  locomotive  with  four  connected 
driving  wheels  (two  on  each  side)  and  a  four-wheel 
forward  truck. 

Primary  Purpose  of  Railways. 

It  is  an  interesting  fact  that  our  early  railway  build- 
ing was  almost  entirely  in  the  interest  of  passenger  and 
mail  transportation.  Mails  must  be  moved  with  rea- 
sonable rapidity ;  when  business,  or  other  reasons,  made 
the  moving  of  individuals  from  one  place  to  another 
necessary,  this  necessity  was  generally  imperative. 
People  did  not  travel  for  pleasure  in  those  days. 

Freight  transportation,  owing  to  the  expense,  was 
an  unknown,  almost  a  negligible  quantity.  Communi- 
ties lived  almost  entirely  within  themselves,  producing 
about  everything  they  consumed  except  a  few  imported 
articles,  and  these  were  looked  upon  as  luxuries.  Peo- 
ple in  the  seaport  towns  like  New  York,  Boston,  Phila- 
delphia, etc.,  used  tea;  those  in  the  interior,  unable  or 
unwilling  to  pay  the  high  cost  of  stage  coach  or  carter's 
van  transportation,  got  along  without  it. 

There  was  very  little  moving  of  freight  from  one 
place  to  another.  If  a  resident  of  city  or  village  needed 
a  wagon,  the  local  wheelwright  made  it;  the  butter, 
eggs,  poultry  and  wheat  were  teamed  in  by  the  neigh- 
boring farmers.  Cordwood  for  fuel  was  abundant  and 
close  at  hand.  Such  a  thing  as  sending  the  surplus 
products  of  farm  or  factory  to  distant  markets  was 


THE   HISTOfiY   OF   TRANSPORTATION. 


31 


unknown  and  impossible;   the  carriage  charge  made 
such  traffic  prohibitive. 

This  was  not  the  fault  of  the  carter;  his  charges  were 
not  extortionate.  They  were  high,  higher  than  the 
traffic  could  bear,  but  this  was  because  his  expenses 
were  relatively  high.     He  traveled  slowly,  his  horses 


"Old  Ironsides,"  Used  in  1832. 

and  himself  had  to  be  fed,  and  his  wagon  capacity  was 
limited.  The  result  was  that  only  a  few  expensive 
articles  could  be  carried.  The  cost  of  transporting  ordi- 
nary products  was  more  than  the  selling  price  of  these 
products  when  landed  at  their  destination. 

What  Railways    Have  Done. 

It  was  the  destiny  of  the  railways  to  change  this 
condition.  By  making  intercourse  between  communi- 
ties reasonably  certain  and  cheap  they  gradually 
brought  about  an  interchange  of  commodities.  The 
North  wanted  something  the  South  had,  and  vice 
ycrsa.    It  became  the  work  of  the  railways  to  make  the 


82  'THE   HISTORY    OF   TRANSPORTATION. 

exchange.  The  man  who  was  making  churns  or  wagons 
for  his  home  community  of  300  people  found  that  the 
railways  afforded  him  the  means  of  reaching  a  larger 
market.  He  put  up  a  factory  and,  instead  of  working 
with  his  own  hands  to  supply  the  limited  needs  of  300 
people,  employed  an  army  of  helpers  to  meet  the  un- 
limited requirements  of  the  vast  population  which  he 
could  reach  by  rail. 

It  was  in  this  way  that  our  present  great  manufac- 
turing enterprises  were  built  up.  It  is  this  same 
agency  which  has  made  it  possible  for  the  farmer  in 
the  West  to  sell  his  grain  in  the  East  at  a  fair  profit, 
instead  of  burning  it  at  home  for  fuel  because  no 
market  could  be  reached. 

Period  of  Greatest  Activity. 

In  1830  the  United  States  had  only  twenty-three 
miles  of  railway.  By  1840  the  mileage  had  increased 
to  2,818.  How  rapid  the  increase  has  been,  and  the 
periods  in  which  there  has  been  the  greatest  activity, 
is  shown  in  the  following  official  figures: 

1830-1840—  2,818  miles. 
1840-1850—  9,021  miles. 
1850-1860—  30,635  miles. 
1860-1870—  52,914  miles. 
1870-1880—  93,296  miles. 
1880-1890—163,597  miles. 
1890-1900—193,346  miles. 
1900-1915—251,984  miles. 

It  is  significant  of  the  intimate  connection  between 
railway  construction  and  industrial  and  agricultural  de- 


THE   HISTORY   OF   TRANSPORTATION.  . 


83 


velopment  that  the  late  years  from  1900  to  1915  mark 
the  period  of  greatest  activity  in  all  three  lines. 

The  Progress  Westward. 

The  year  1862  found  railway  communication  with 
the  Missouri  River  established,  a  line  tapping  that 
stream  at  St.  Joseph's,  which  was  then  the  most  im- 


An  Old-Time  Passenger  Coach, 

portant  town  on  the  river.  Progress  from  Buffalo 
westward  was  slow.  An  important  link  in  this  system 
of  rail  communication  was  the  Pontiac  &  Detroit  line, 
completed  in  1845.  Another  was  the  Detroit  &  St. 
Joseph  Railroad,  now  the  Michigan  Central,  a  portion 
of  which  running  to  Ypsilanti,  was  opened  in  1838. 

Raiboading  was  not  without  its  tribulations  in  those 
days.  A  grand  banquet  was  given  at  Ypsilanti  when 
the  road  was  formally  opened,  a  special  train  conveying 
many  distinguished  guests  from  Detroit.  On  the  re- 
turn trip  the  one  engine  owned  by  the  company  broke 
down,  and  the  train  was  hauled  back  to  Detroit  by 
relays  of  horses. 

I.B.I,.  Vol.  8—3 


84  THE    HISTORY   OF   TRANSPORTATION. 

Earnings  in  the  Early  Days. 

The  Detroit  &  St.  Joseph  was  a  State  road,  and  the 
progress  of  construction,  earnings,  etc.,  was  watched 
with  great  interest.  In  its  issue  of  May  19,  1838,  the 
Detroit  Journal  ^  Courier  contains  this  cheerful  an- 
nouncement : 

"It  is  gratifying  to  know  that  the  freight  and  travel 
on  this  State  road  are  increasing  rapidly.  The  average 
receipts  for  several  days  past  have  been  upwards  of 
$300.  On  Monday  they  were  $326;  Tuesday,  $431; 
Wednesday,  $310;  and  Thursday,  $372." 

In  February,  1846,  the  road  was  completed  to  Kala- 
mazoo; and,  notwithstanding  the  gratifying  showing  in 
the  way  of  earnings,  the  State,  in  the  latter  part  of  this 
year,  having  expended  $1,954,308.28  on  the  road,  de- 
cided to  sell  it  to  a  railroad  corporation  organized  to 
take  it  over,  for  $2,000,000.  It  required  six  years  of 
further  struggle  to  complete  the  road  to  Chicago. 

Birth  of  Transcontinental  Route. 

It  was  in  this  manner,  piece  by  piece,  that  the  present 
great  railway  system  of  our  country  was  built  up. 
Small  stretches  of  road  were  constructed  by  independ- 
ent companies  after  the  plan  inaugurated  in  New 
York  and  Pennsylvania,  and,  after  these  had  become 
reasonably  well  connected,  the  various  roads  were 
bought  up  and  consolidated.  At  the  time  the  Missouri 
was  reached  in  1862  there  were  about  32,000  miles  of 
road  in  operation  in  all  parts  of  the  country. 


THE   HISTORY   OF   TBANSPORTATION.  85 

The  Civil  War,  and  conflicts  with  the  Indians  in  the 
West,  demonstrated  the  need  of  a  through  trans- 
continental Hne  for  the  speedy,  certain  movement  of 
troops  and  supplies,  as  well  as  goods  to  and  from  San 
Francisco  in  case  the  seaports  of  the  Atlantic  and  the 
Gulf  should  be  effectually  blockaded.  It  was  this 
emergency  which  led  to  the  building  of  the  Union  and 
Central  Pacific  roads. 

How  the  Pacific  Was  Reached. 

Conditions  were  not  inviting  for  the  investment  of 
private  capital.  The  country  between  the  Missouri  and 
the  Pacific  Coast  was  peopled  mainly  by  hostile  In- 
dians. Traffic  was  naturally  insignificant.  But  the 
exigencies  of  the  time  demanded  a  road,  and  to  secure 
it  the  Federal  government  was  forced  to  extend  finan- 
cial aid.  This  it  did  by  issuing  special  bonds,  the  pro- 
ceeds of  which  were  used  for  the  construction  of  the 
road.  The  money  thus  raised  was  to  be  paid  back 
to  the  government  in  the  hauling  of  troops  and  supplies, 
transportation  of  mails,  transmission  of  telegraph  mes- 
sages, etc. 

For  many  years  the  Pacific  roads  were  far  from 
profitable,  but  in  time  the  country  was  settled,  an  im- 
mense traffic  resulted,  and  finally  the  government  claim 
was  paid  in  full.  Today  there  are  five  great  American 
trunk  lines  in  operation  to  the  Pacific  Coast,  and  one 
more  in  course  of  construction.  Canada  also  has  two 
through  lines,  and  work  on  a  third  is  being  pushed 
rapidly. 


36  THE   HISTORY   OF   TRANSPORTATION. 

Result  of  Railway  Transportation. 

Before  the  development  of  railway  transportation, 
the  great  trade  centers  were  naturally  on  the  sea  coast 
or  rivers.  Water  transportation  was  cheap  and  easy, 
and  trade  followed  the  cheapest  route.  The  seaports 
have  retained  their  prominence,  but,  in  many  instances, 
the  advantages  gained  by  inland  towns  which  were 
located  on  navigable  waters  have  been  to  a  great  degree 
lost. 

There  was  a  time  when  St.  Louis,  by  reason  of  its 
river  trade,  far  out-ranked  Chicago  in  commercial  im- 
portance, but  as  the  railways  began  to  make  the  latter 
city  a  central  headquarters  it  took  on  a  phenomenal 
growth,  and  is  today  second  only  to  New  York  in 
population,  wealth,  and  volume  of  trade. 

Rates  on  the  Pioneer  Roads. 

Reference  has  been  made  to  the  rates  on  the  pioneer 
railways  being  much  lower  than  those  possible  on  stage 
coaches  or  carter's  van,  and  that  in  this  may  be  found 
the  prime  cause  of  the  phenomenal  growth  of  the 
United  States.  This  is  correct,  but  these  rates  were 
only  relatively  low.  The  shippers  of  today  would  be 
horror-stricken  if  asked  to  pay  the  same  charges  for 
railway  transportation  as  were  in  effect  from  1830  to 
1850. 

During  the  period  named  the  rates  for  transporting 
goods  by  rail  were  seven  and  one-half  times  greater 
than  those  now  in  force.  Where  it  now  costs  one  dol- 
lar to  transport  a  given  amount  of  freight  fj-om  New 
York  to  Chicago,  the  charge,  up  to  1850  and  even  later. 


THE   HISTORY   OF   TRANSPORTATION, 


sr 


was  $7.50,  and  even  this  was  then  looked  upon  as 
reasonable. 

Speed  in  Ye  Olden  Time. 

In  the  matter  of  speed  there  also  has  been  a  wonder- 
ful transformation.  When  the  first  line  from  Phila- 
delphia to  Pittsburg  was  built,  in  1834,  there  was  great 


:^^f' 


First  Locomotive  Built  by  Brooks  in  1836. 

rejoicing  over  the  fact  that  the  journey  could  be  made 
in  three  and  one-half  days — 84  hours.  But  this  great 
feat  was  only  possible  after  the  road  had  been  "im- 
proved," which  was  in  1837.  Today  a  journey  from 
Philadelphia  to  San  Francisco  may  be  made  in  the 
same  time. 

In  those  days,  a  person  desiring  to  travel  from 
Philadelphia  to  Louisville  would  go  to  Pittsburg  by 
rail  and  there  take  passage  in  a  "packet,"  a  canal  boat 
drawn  by  horses.    Freight  was  sent  over  the  same  route. 


88  THE   HISTORY   OF   TRANSPORTATION. 

Sixty  years  is  a  short  period,  comparatively  speaking, 
but  into  the  past  sixty  years  have  been  crowded  more 
progress  in  the  matter  of  transportation  by  both  land 
and  water  than  can  be  recorded  in  the  whole  previous 
history  of  the  world. 


CHAPTER  II. 

ORGANIZATION  OP  OPERATING  FORCE. 

In  the  handling  of  transportation  matters,  the  one 
prime  requisite,  aside  from  necessary  equipment,  is 
thorough  organization  of  the  operating  force.  We 
must,  of  course,  have  the  equipment  first,  but  unless 
this  equipment  is  properly  made  use  of  the  results  will 
be  far  from  satisfactory.  In  no  line  of  transportation 
effort  is  this  better  shown  than  in  railroading.  The 
modern,  well-managed  railway  or  steamship  line  moves 
with  the  regularity  and  precision  of  watch  mechanism. 
Its  operating  department  is  a  huge  human  machine, 
composed  of  human  cogs,  each  interfitting  and  per- 
forming a  well-defined  duty. 

Organized  Like  an  Army. 

To  secure  unity  of  action  toward  the  desired  end  the 
operating  department  is  organized  hke  an  army.  There 
is  first  a  general-in-chief,  a  commander,  who  is  there 
to  carry  out  the  desires  of  the  people  in  whose  service  he 
is  employed.  The  general  of  an  army  gets  his  instruc- 
tions from  the  War  Department,  and  the  latter  from 
Congress,  which  is  representative  of  the  people.  The 
general  manager  of  a  railway  or  steamship  line  takes 
his  orders  from  the  president  and  chairman  of  the  exec- 
utive board;  these  represent  the  directors,  and  the 
directors  in  turn  voice  the  desires  of  the  stockholders. 
No  soldier  would  think  of  going  over  the  head  of  his 

39 


40       ORGANIZATION  OF  OPERATING  FORCE. 

general  to  make  suggestion  or  complaint  to  the  War 
Department.  Neither  will  a  real  railroad  man  dispute 
or  disobey  the  orders  of  the  general  manager.  Each 
official  is  supreme,  so  far  as  operations  are  concerned, 
and  responsible  only  to  his  immediate  superiors. 

Organization  of  Union  Pacific. 

The  method  in  vogue  on  the  Union  Pacific,  which  is 
accredited  with  being  one  of  the  best  organized  rail- 
way systems  in  the  country,  may  be  taken  as  illustrative 
of  the  latest  and  most  effective  plan  of  organization. 

Here  we  find  six  general  departments,  the  heads  of 
which  all  report  direct  to  the  general  manager.  These 
six  departments  are  those  of  general  superintendent, 
chief  engineer,  superintendent  of  motive  power,  super- 
intendent of  coal  service,  purchasing  agent,  and  chief 
surgeon. 

Each  of  these  officials  in  turn  has  under  him  well- 
organized  departments,  each  with  its  responsible  head, 
and  these  departments  are  again  subdivided.  Every- 
where there  is  system,  system  so  perfect  that  a  missing 
coupling-pin  can  be  located. 

Duties  of  General  Superintendent. 

Next  to  the  general  manager  the  general  superin- 
tendent is  the  most  important  official.  He  controls 
six  sub-departments,  consisting  of  division  superin- 
tendents, car  service  agents,  special  agent,  superin- 
tendent of  telegraph,  superintendent  of  dining  cars 
and  hotels,  scale,  fire  and  sanitary  inspector. 


ORGANIZATION  OF  OPERATING  FORCE. 

I  UNION  PACIFJC    STOCKHOLDERS         | 


BOARD  OF  DIRECTORS 


PRESIDENT   AND  CHAIRMAN  OF  BOARdI 


Vice  Pres.a 
Cen.Mgr. 


41 


Chief 
Surgeon 


•Chief 
Engineer 


jSurgeons] 


As«1. 
HEngineer 


Gen. 
5upt. 


Signal 
"1  Engineer 


•       v.Wks 


„5upt  f        I     Sup'f.   I        iPuiciMSing 


Engineer   ~ 


Engineer 
of  tests 


1 


Siationer  . 


-  I 


j6en»ral   I 


Shops     p  I 

I 


Storo 
Keepers 


^   l^%^gr1 


^Div. 


'n^'er 


is!r^ 


ffvwc*}-— ■ 


Sign«lmen 


Road 
Masters 


H 


Oi^^pl 


5«ctioa| 
foremen 


^] 


Master 


Station 
Agents 


Vlasters 


_„  Chief 
Dispatcher 


Operators  L. 


Station 
Clerks 


Slotion 
Laborers 


rard 
Men 


Oispaithers 


lispgkhing 
Iperatora 


fewnieri'^l 


Shop 
Men 


-  Enginewerj- 


iTreinmeo 


42       ORGANIZATION  OF  OPERATING  FORCE. 

It  would  be  impossible  for  one  man  to  give  personal 
attention  to  all  the  operating  details  of  an  entire  rail- 
way of  any  considerable  size,  so  the  road  is  usually  cut 
up  into  divisions,  at  the  head  of  each  of  which  is  a 
division  superintendent  who  reports  to  the  general 
superintendent,  and  to  him  only.  To  all  practical  pur- 
poses, so  far  as  operation  is  concerned,  each  of  these 
divisions  is  a  separate  and  distinct  road.  The  general 
superintendent,  by  keeping  in  close  touch  with  condi- 
tions on  each  division,  understands  the  situation  on  the 
entire  line,  and  is  thus  in  position  to  secure  the  results 
which  his  superiors  expect. 

Duties  of  Other  Officials. 

Before  there  can  be  successful  operation,  the  road 
and  its  equipment  must  be  in  condition  to  operate. 
This  is  the  duty  of  the  general  superintendent's  col- 
lateral officials — ^they  must  get  the  road  in  condition 
for  him  to  run.  The  engines  and  cars  must  be  in  shape 
for  service — this  is  the  duty  of  the  superintendent  of 
motive  power;  fuel  is  needed  at  convenient  points — ^it 
is  secured  and  distributed  by  the  superintendent  of  coal 
service;  the  engineering  department  sees  that  the 
bridges,  buildings,  roadbed,  etc.,  are  in  proper  condi- 
tion; the  purchasing  agent  looks  after  the  needed  sup- 
plies, etc. 

All  of  these  services  are  essential  to  the  success  of 
the  general  superintendent.  As  a  general  rule,  he  has 
no  direct  control  over  these  departments,  but  at  the 
same  time  is  largely  dependent  upon  them.  The  heads 
of  these  various  collateral  departments  report  direct  to 
the  general  manager. 


ORGANIZATION  OF  OPERATING  FORCE.       43 

What  Division  Superintendeuts  Do. 

Each  division  superintendent  is  supreme  in  his  terri- 
tory as  to  matters  of  operation,  and  responsible  only 
to  his  chief.  Under  him  are  the  following  officials  and 
their  employees: 

Assistant  division  superintendent,  train  master,  mas- 
ter mechanic,  division  engineer,  travelling  engineers, 
general  foreman,  carpenters,  station  agents,  yard  mas- 
ters, chief  dispatcher,  signal  supervisor,  signalmen, 
operators,  yardmen,  dispatching  operators,  enginemen, 
trainmen,  road  masters,  section  foremen,  station  hands, 
etc.  He  has  control  over  everybody  in  any  way  con- 
nected with  the  actual  operation  of  the  road  on  his 
division. 

In  two  instances — enginemen  and  division  engineers 
— there  is  a  division  of  authority  in  some  instances,  but 
this  is  unavoidable.  If  an  engineman  is  wasteful  in 
the  matter  of  fuel,  or  careless  in  the  handling  of  his 
engine,  so  as  to  invite  expensive  repairs,  he  will  find 
himself  in  trouble  with  the  superintendent  of  motive 
power.  If  a  work  of  engineering  out  of  the  ordinary 
is  to  be  done,  the  division  engineer  will  be  under  the 
authority  of  the  chief  engineer,  rather  than  of  the  divi- 
sion superintendent. 

Routine  of  Railway  Work. 

If  a  track  laborer  discovers  a  defect  of  any  impor- 
tance in  the  roadbed  which  he  cannot  repair,  he  reports 
it  to  the  section  foreman.  If  it  is  beyond  the  ability 
of  the  latter  to  make  good,  or  requires  skilled  men  or 
materials,  he  calls  on  the  road  master.     In  unusually 


44       ORGANIZATION  OF  OPERATING  FORCE. 

serious  instances  the  division  engineer  is  called  upon, 
and  from  him  report  may  be  made  to  the  division  super- 
intendent. Generally  the  routine  ends  here,  but  some- 
times there  are  emergencies  in  which  the  general 
superintendent  must  be  consulted.* 

Every  man  has  his  place  and  well-defined  duty. 
Whatever  is  within  the  line  of  this  duty  he  must  do. 
But  there  is  a  limit  to  this  duty,  beyond  which  he  is 
not  expected  to  go,  except  in  cases  of  emergency,  with- 
out consulting  the  official  immediately  above  him  in 
rank.  It  is  by  adhering  closely  to  this  system  that  the 
roadbed  and  equipment  are  kept  in  good  condition,  and 
trains  moved  with  regularity.  This  is  the  field  of  the 
general  superintendent. 

Duties  of  General  Freight  Agent. 

At  the  head  of  the  freight  department,  and  report- 
ing direct  to  the  general  manager,  is  the  general  freight 
agent.  It  is  his  work  to  make  rates  that  will  secure 
traffic  for  his  road  and  at  the  same  time  be  remunerative 
to  the  company.  He  is  in  full  charge  of  everything 
pertaining  to  freight,  its  receiving,  forwarding,  and 
delivery. 

Under  the  general  freight  agent,  and  reporting  direct 
to  him,  are  the  numerous  sub-officials  and  clerks  in  the 
general  freight  office,  the  hundreds  of  agents  who  han- 
dle freight  at  initial  and  way  stations.  If  a  shipment 
is  lost,  delayed,  or  miscarried,  the  general  freight  agent, 
through  some  subordinate,  must  trace  and  locate  it. 
Should  a  shipper  make  claim  for  an  overcharge,  it  is 
the  general  freight  agent  who  must  investigate  and 
make  refund  if  the  claim  is  substantiated.     The  claim 


ORGANIZATION  OF  OPERATING  FORCE.       45 

may  never  reach  him  personally — it  probably  will  not — 
but  one  of  his  subordinates  will  attend  to  it. 

Duties  of  General  Passenger  Agent. 

In  similar  manner  the  general  passenger, agent,  also 
reporting  to  the  general  manager,  is  in  control  of  all  the 
passenger  business  of  the  company.  Every  man  or 
woman  who  sells  tickets,  or  handles  ticket  money  in 
any  form,  is  subordinate  to  the  general  passenger  agent. 
So  are  all  the  sub-officials,  the  clerks  in  the  general 
office,  the  travelling  and  city  passenger  agents,  and  the 
men  who  get  up  excursions  "to  points  of  unusual 
interest." 

Whenever  an  advertisement  is  printed  in  a  news- 
paper, or  a  poster  appears  setting  forth  in  big  type  and 
dazzling  colors  the  attractions  of  some  particular  place 
or  event  on  the  line  of  the  company,  it  is  the  work  of 
the  general  passenger  agent — not  done  by  him  in  per- 
son, but  by  one  of  his  most  valuable  and  best-paid  assis- 
tants, the  advertising  man. 

Organization  Must  Be  Thorough. 

Everything  connected  with  the  successful  operation 
of  a  railroad  depends  upon  organization.  If  the  organ- 
ization is  thorough  and  sound,  the  results  will  be  good; 
if  it  is  weak,  or  lacking  in  any  important  respect,  disas- 
ter will  follow.  The  strongest  railroad  or  steamship 
company  in  the  world  can  be  wrecked  by  lack  of  syste- 
matic effort  and  conduct  of  its  business.  The  end  may 
be  long  delayed,  but  it  will  come  eventually.  Leaks, 
small  at  first  but  gradually  increasing,  until  enormous 


46       ORGANIZATION  OF  OPERATING  FORCE. 

sums  of  money  are  lost,  will  occur;  the  roadbed  will 
run  down  and  equipment  wear  out.  Patrons  will  be- 
come dissatisfied  and  transfer  their  business.  When 
these  conditions  arise  the  result  is  easy  to  foresee. 

Various  Other  Departments. 

On  all  large  transportation  lines  there  are  other  de- 
partments, reporting  either  to  the  general  manager,  or 
some  specially  delegated  vice-president.  None  of  these, 
however,  have  anything  to  do  with  the  operation  of  the 
road.  They  are  usually  clerical,  legal  or  financial  in 
their  nature. 


CHAPTER  III. 
KELATIONS  OF  CARRIER  AND  SHIPPER. 

There  is  marked  difference  in  the  relations  of  carriers 
by  water  and  carriers  by  rail  as  regards  the  shipper.  In 
the  ease  of  water  transportation  the  owner  of  the  vessel 
assumes  little  or  no  liability  beyond  the  simple  carriage 
of  the  goods  entrusted  to  him.  He  is  not  responsible 
for  delays,  loss  by  theft,  damage  in  transit,  or  by  the 
sinking  of  his  vessel  by  storm,  collision  or  accident,  im- 
less  the  loss  is  caused  by  design,  gross  carelessness  or 
incapacity  on  the  part  of  the  master  or  crew.  Shippers 
by  water  routes  therefore  almost  invariably  insure  the 
goods  they  ship,  provided  the  quantity  is  large  enough 
to  warrant  the  expense. 

Liability  of  Railroads. 

The  common  carrier  on  land,  the  railroad,  is  in  a 
different  position.  By  the  express  terms  of  the  uni- 
form bill  of  lading,  endorsed  by  the  Interstate  Com- 
merce Conmiission,  a  railway  becomes  responsible  to 
the  shipper,  with  certain  reasonable  exceptions,  for  the 
safe  carriage  and  delivery  of  goods  committed  to  its 
care  for  transportation.  The  opening  paragraph  of 
the  official  uniform  bill  of  lading  says : 

"The  carrier  or  party  in  possession  of  any  of  the 
property  herein  described  shall  be  liable  for  any  loss 
thereof  or  damage  thereto,  except  as  hereinafter  pro- 
vided." 

47 


48  RELATIONS   OF   CARRIER  AND   SHIPPER. 

This  is  broad  and  explicit  enough  to  remove  any 
doubt  as  to  the  liability  of  the  carrier  in  case  of  loss. 
The  shipper  must  deliver  his  freight  for  transporta- 
tion in  good  condition,  full  weight,  and  properly 
packed.  Once  thus  delivered  to  the  custody  of  a  rail- 
road the  responsibility  of  the  shipper  ends,  and  that 
of  the  carrier  begins,  terminating  only  when  the  freight 
is  turned  over  to  the  consignee  at  point  of  destination. 

When  Railroads  Are  Exempt. 

It  is  held  that  the  railroad  must  protect  property 
committed  to  its  care  for  transportation,  but  there  are 
certain  conditions  under  which  it  can  not  extend  this 
protection.  These  conditions  of  exemption  are  ex- 
pressly stipulated  as  follows: 

Damage  or  delay  caused  by  the  act  of  God,  such  as 
washout  and  fire  by  lightning  stroke,  confiscation  by 
the  public  enemy,  differences  in  weight  caused  by  natu- 
ral shrinkage  or  discrepancies  in  elevator  weights,  loss 
by  strikes  or  riots,  damage  by  fire  when  goods  have 
remained  uncalled  for  at  point  of  destination  more  than 
forty-eight  hours,  or  loss  or  damage  of  any  kind  on 
another  line  to  which  it  may  be  necessary  to  transfer 
goods  in  order  to  complete  the  journey. 

What  Railroads  Must  Do. 

With  these  exceptions  the  land  carrier  assumes  to- 
ward the  shipper  the  relation  of  an  insurer.  For  an 
agreed  upon  charge  it  contracts  to  not  only  transport 
the  goods,  but  to  deliver  them  promptly  and  in  good 
condition.  If  the  railroad  receipts  for  goods  as  being 
in  good  condition  it  must  deliver  them  in  similar  good 


RELATIONS   OF    CARRIER   AND    SHIPPER.  49 

condition  to  the  consignee.  This  extends  even  to  per- 
ishable commodities,  provided  they  are  so  marked  and 
properly  packed.  Should  delay  ensue  en  route  owing 
to  an  act  of  God,  a  raid  by  an  enemy,  a  strike  or  a 
riot,  and  the  goods  be  spoiled  in  the  delay,  the  railroad 
would  not  be  liable  for  the  loss.  This  is  a  chance  taken 
by  the  shipper.  But  if  the  delay  is  one  which  might 
have  been  avoided  by  the  exercise  of  due  diligence  or 
common  sense  on  the  part  of  the  carrier's  employees 
the  railroad  must  settle  the  loss. 

Loss  Arising  from  Fire. 

Should  a  fire  occur  from  natural  causes,  either  en 
route,  or  while  the  goods  are  still  in  the  possession  of 
the  carrier  (with  the  exception  previously  noted),  the 
railroad  must  pay  for  them,  the  same  as  an  insurance 
company  would  if  it  had  issued  a  policy  on  them.  To 
this  extent  the  bill  of  lading  is  an  insurance  policy. 

A  shipped  a  quantity  of  baled  hay  by  the  B  railroad. 
While  being  loaded  into  a  car  by  B  employees,  it  was 
set  on  fire  by  a  spark  from  a  pipe  a  bystander  was 
smoking,  and  totally  destroyed.  B  settled  for  the  hay 
at  the  price  then  ruling  at  the  point  of  shipment. 

C  shipped  gasolene  by  the  D  road  and  neglected  to 
attach  a  red  warning  label  as  the  law  requires.  One 
of  D's  employees  threw  a  hghted  match  in  the  vicinity 
of  the  gasolene.  An  explosion  and  total  loss  followed. 
D  refused  to  pay  the  loss.  C  sued  and  was  defeated, 
the  courts  ruling  that  he  was  guilty  of  contributory 
negligence  in  not  attaching  the  warning  label. 

I.B.L.  Vol.  »— ♦ 


50  EOLATIONS   OF   CARRIER   AND   SHIPPER. 

Liability  Confined  to  Own  Soad. 

A  common  carrier  by  rail  is  liable  only  for  the  safe 
transportation  of  passengers  and  freight  over  its  own 
line.  It  frequently  happens  that,  in  order  to  reach  the 
point  of  destination,  a  car  has  to  be  transferred  from 
one  road  to  another.  A  car  of  grain,  for  instance,  is 
routed  from  Chicago  via  the  Nickle  Plate  to  some 
point  on  the  West  Shore  road  in  New  York.  The 
Nickle  Plate  receives  and  receipts  for  the  grain,  but 
can  transport  it  only  to  Buffalo,  where  it  is  turned  over 
to  the  West  Shore,  which  receives  its  pro  rata  of  the 
freight  charge.  If  an  accident  occurs  between  Chicago 
and  Buffalo  the  shipper  looks  to  the  Nickle  Plate  for 
redress.  If  the  damage  is  done  between  Buffalo  and  the 
point  of  destination,  the  responsibility  rests  with  the 
West  Shore. 

Law  of  Principal  and  Agent. 

The  shipper  has  had  no  direct  dealings  with  the  West 
Shore.  His  transaction  has  been  entirely  with  the 
Nickle  Plate,  and  the  bill  of  lading  receipt  issued  by 
the  latter  is  the  only  documentary  evidence  of  shipment 
which  the  shipper  holds.  But  this  does  not  release  the 
West  Shore.  In  receiving  the  freight  at  Chicago  the 
Nickle  Plate  acts  as  principal  only  over  its  own  line. 
For  the  transportation  from  Buffalo  to  destination  it 
acts  in  the  capacity  of  agent  for  both  the  shipper  and 
the  West  Shore  road.  It  is  well  understood  in  law  that 
a  principal  is  bound  by  the  acts  of  an  agent,  provided 
those  acts  are  within  the  authority  of  the  agent. 


:relations  of  carrier  and  shipper.  51 

It  is  by  general  acceptance  of  this  policy  that  through 
shipments  are  made  possible.  Should  it  be  abandoned 
we  would  have  to  revert  to  the  old  system  of  making 
a  new  shipment  at  each  transfer  point,  with  its  annoying 
delays  and  confusion. 

Old  Plan  Slow  and  Expensive/ 

Take  the  case  of  a  shipper  in  New  York  who  desires 
to  forward  a  carload  of  merchandise  to  St.  Paul.  If 
the  old  system  were  in  vogue,  each  road  operating  inde- 
pendently of  the  others,  the  car  would  be  taken  over, 
say,  the  New  York  Central  to  Buffalo.  There  the  Cen- 
tral would  stop  its  own  car,  unload  it,  and  turn  the 
merchandise  over  to  the  Michigan  Central,  which  would 
reload  it  in  one  of  its  cars.  This  operation  would  again 
be  repeated  at  Chicago,  where  the  Chicago,  Milwaukee 
&  St.  Paul  would  take  charge. 

Thus  there  would  be  a  breaking  of  bulk  three  times, 
with  unavoidable  delay  and  expense,  each  road  into 
whose  charge  the  merchandise  passed  issuing  a  receipt 
therefor. 

How  the  Modern  Plan  Works. 

Under  the  modern  plan  of  having  the  various  roads 
act  as  agents  for  connecting  roads,  there  is  no  breaking 
of  bulk,  and  a  lot  of  delay  and  expense  is  avoided. 
The  receiving  road  loads  the  merchandise  into  one  of 
its  cars,  and  this  car  goes  through  to  destination,  its 
seals  unbroken,  no  matter  how  many  different  roads 
it  may  be  necessary  to  haul  it  over  in  completing  the 
journey. 

The  bill  of  lading  first  issued  is  the  only  one  the 


52  RELATIONS   OF   CARRIER   AND    SHIPPER. 

shipper  receives,  but  every  road  over  which  the  car 
travels  in  reaching  its  destination  is  bound  by  it,  so 
far  as  responsibiHty  for  safe  transit  over  its  own  line 
is  concerned.  A  car  might  travel  in  safety  over  the 
New  York  Central,  the  Michigan  Central  and  the  Chi- 
cago, Milwaukee  &  St.  Paul  to  St.  Paul,  and  be  de- 
stroyed in  the  freight  yards  at  St.  Paul.  In  such  a 
case  there  could  be  no  evasion  of  responsibiHty.  The 
Chicago,  Milwaukee  &  St.  Paul  would  have  to  settle 
with  the  shipper. 

Shippers  Have  Responsibilities. 

Claims  for  damages  are  settled  on  the  basis  of  the 
actual  value  of  the  property  involved,  unless  the  ship- 
per in  order  to  secure  a  low  rate  has  purposely  under- 
stated the  value  to  the  railroad,  in  which  event  the  car- 
rier is  liable  for  the  stated  value  only.  Here  comes  in 
the  bounden  duty  of  the  shipper  to  deal  fairly  with  the 
carrier. 

Should  a  shipper  take  out  insurance  on  his  own 
account,  and  a  loss  ensue,  the  carrier  will  have  the  bene- 
fit of  this  insurance  if  such  carrier  settles  with  the  ship- 
per, unless  there  is  a  special  agreement  to  the  contrary. 

When  it  becomes  necessary,  through  faulty  work  on 
the  part  of  the  shipper,  to  repack  merchandise  in  tran- 
sit, a  carrier  may  have  the  work  done  at  the  expense 
of  the  shipper,  adding  cost  of  same  to  the  freight 
charges. 

Two  Extremes  of  Liability. 

A  railroad  was  transporting  a  carload  of  fruit  in 
the  early  fall  when  favorable  weather  conditions  might 


RELATIONS    OF    CARRIER  AND   SHIPPER.  53 

reasonably  be  expected.  No  provision  was  made  to 
protect  the  fruit  from  freezing,  as  it  was  at  a  time  of 
year  when  frosts  were  unheard  of.  During  the  journey 
the  weather  changed  suddenly,  there  was  a  sharp  freeze, 
and  the  fruit  was  ruined. 

Efforts  on  the  part  of  the  shipper  to  collect  damages 
from  the  carrier  were  defeated  in  every  court,  from  that 
in  which  trial  was  had  to  the  supreme  bench.  The  rul- 
ing in  all  was  the  same — ^the  frost  at  that  time  of  year 
was  an  unexpected  act  of  God,  which  could  not  be  pro- 
vided against. 

In  another  instance,  fruit,  properly  packed  and 
marked,  was  shipped  late  in  the  fall  when  freezing 
weather  was  at  hand,  and  was  destroyed  in  transit.  It 
was  shown  that  the  employees  of  the  carrier  allowed 
the  stove  fires  to  die  out  en  route,  and  the  shipper  ob- 
tained a  verdict  against  the  carrier. 

Liability  of  Carriers  by  Water. 

As  a  general  proposition,  wilful  design  or  neglect  on 
the  part  of  the  master  of  a  vessel  or  its  crew  must  be 
shown  before  there  can  be  recovery  for  loss  or  damage. 
The  broad  difference  between  the  liability  of  rail  and 
water  carriers  is  made  because  of  the  supposedly  greater 
risks  and  dangers  attendant  upon  water  travel.  It  is 
argued  that  the  shipper  by  water  is  conversant  with 
these  risks,  gets  the  benefit  of  low  rates  for  transpor- 
tation, and  if  he  wishes  protection  against  loss,  is  in 
position  to  obtain  it  by  insurance. 

Where  liability  does  attach  to  a  vessel,  the  amount 
of  such  liability  is  limited  to  the  actual  value  of  the 
vessel  and  the  freight. 


^i 


54  RELATIONS   OF   CARRIER   AND   SHIPPER. 

Liability  of  Vessel  Owners  Limited. 

It  frequently  happens  that  a  vessel  is  owned  by  sev- 
eral individuals.  In  such  case  no  owner  can  be  held 
liable  to  a  greater  amount  than  his  share  of  ownership 
bears  to  the  total  value  of  the  vessel.  If  a  vessel  is 
worth  $100,000  and  A  owns  a  $10,000  share,  his  pro 
rata  of  any  loss  which  might  occur  would  be  one-tenth 
of  such  loss.  If  the  loss  were  $25,000,  A's  share  would 
be  $2,500.    This  limitation  is  fixed  by  Federal  statute. 

Should  an  owner  or  master  deliberately  wreck  oi' 
otherwise  destroy  a  vessel  in  order  to  collect  the  hull 
insurance  (as  has  often  been  done),  or  for  any  other 
purpose,  the  owner  would  undoubtedly  be  liable  for 
losses  which  might  be  sustained  by  shippers. 

Incompetency  Begets  Liability. 

Aside  from  this,  very  little  liability  attaches  to  car- 
riers by  water,  except  that  arising  from  gross  careless- 
ness or  incapacity.  Should  the  owners  of  a  vessel  send 
it  on  a  voyage  in  charge  of  an  incompetent  master,  or 
with  an  ignorant,  inadequate  crew,  "short-handed,"  as 
sailors  say,  there  would  be  liability.  But  the  burden  of 
proof  as  to  this  incompetency  or  inadequacy  would  rest 
with  those  who  sought  to  recover  damages. 

The  Federal  statute  describes  how  certain  dangerous 
freights  shall  be  packed  and  marked  for  transport,  and 
expressly  prohibits  the  transportation  of  such  freights 
by  passenger  craft  under  any  conditions. 

Defined  by  Federal  Statute. 

How  closely  the  liability  of  carriers  by  water  is  de- 
fined, may  be  seen  in  the  following  excerpt  from  the 
Federal  statute  governing  navigation; 


RELATIONS   OF   CARRIER  AND   SHIPPER.  55 

Sec.  3. — That  if  the  owner  of  any  vessel  transporting 
merchandise  or  property  to  or  from  any  port  in  the 
United  States  of  America  shall  exercise  due  diligence 
to  make  the  said  vessel  in  all  respects  seaworthy  and 
properly  manned,  equipped,  and  supplied,  neither  the 
vessel,  her  owner  or  owners,  agent,  or  charterers  shall 
become  or  be  held  responsible  for  damage  or  loss  result- 
ing from  faults  or  errors  in  navigation  or  in  the  manage- 
ment of  said  vessel  nor  shall  the  vessel,  her  owner  or 
owners,  charterers,  agent,  or  master,  be  held  liable  for 
losses  arising  from  dangers  of  the  sea  or  other  navi- 
gable waters,  acts  of  God,  or  pubHc  enemies,  or  the 
inherent  defect,  quahty,  or  vice  of  the  thing  carried,  or 
from  insufficiency  of  package,  or  seizure  under  legal 
process,  or  for  loss  resulting  from  any  act  or  omission 
of  the  shipper  or  owner  of  the  goods,  his  agent  or  repre- 
sentative, or  from  saving  or  attempting  to  save  hfe  or 
property  at  sea,  or  from  any  deviation  in  rendering 
such  service. 

Should  the  master  of  a  freight-laden  craft  meet  a 
disabled  vessel  at  sea  and  the  rescue  of  passengers  or 
crew  from  the  latter  be  advisable,  the  master  of  the 
rescuing  craft  would  have  authority  under  this  clause 
to  dump  overboard  any  part  or  all  of  his  cargo,  if 
necessary,  and  the  owners  thereof  could  not  recover 
for  the  loss  unless  they  had  the  goods  insured.  Like- 
wise a  master,  in  case  of  storm  or  other  disaster,  would 
have  the  right  to  jettison  (throw  overboard)  his  cargo 
in  an  effort  to  save  his  ship,  and  no  liabihty  for  damages 
would  attach  to  his  act. 

Liability  for  Improper  Handling. 

Carriers  by  water  must  exercise  due  care  in  the  han- 
dling of  freights  as  regards  loading,  stowing  in  vessel 


56  RELATIONS   OF    CARRIER   AND   SHIPPER. 

and  delivery.  Loss  occasioned  in  the  improper  or  care- 
less handling  of  freights  while  being  loaded  or  un- 
loaded, or  resulting  directly  from  improper  stowage, 
is  recoverable.  On  this  point  the  Federal  statute  says: 
It  shall  not  be  lawful  for  the  manager,  agent, 
master,  or  owner  of  any  vessel  transporting  merchan- 
dise or  property  from  or  between  ports  of  the  United 
States  and  foreign  ports  to  insert  in  any  bill  of  lading 
or  shipping  document  any  clause,  covenant,  or  agree- 
ment whereby  it,  he,  or  they  shall  be  relieved  from 
liability  for  loss  or  damage  arising  from  negligence, 
fault,  or  failure  in  proper  loading,  stowage,  custody, 
care,  or  proper  delivery  of  any  and  all  lawful  merchan- 
dise or  property  committed  to  its  or  their  charge.  Any 
and  all  words  or  clauses  of  such  import  inserted  in  bills 
of  lading  or  shipping  receipts  shall  be  null  and  void 
and  of  no  effect.  [The  provisions  of  this  section  are 
not  applicable  to  the  transportation  of  live  animals,  by 
section  7  of  this  act.] 


CHAPTER   IV. 
MAKING  RATES  AND  FARES. 

In  making  railroad  rates  to  meet  competitive  condi- 
tions, some  localities  are  certain  to  receive  more  favor- 
able treatment  than  others.  These  discriminations, 
however,  between  persons,  places  and  different  com- 
modities must  be  reasonable.  The  rates  must  be  just 
to  all  concerned.  The  railroads  must  not  so  discrimi- 
nate against  any  place  as  to  prevent  its  healthy  devel- 
opment. 

The  Government  regulation  of  rates  is  designed 
principally  to  prevent  the  competitive  struggles  of 
railroad  companies  from  resulting  in  unreasonable  dis- 
criminations in  rates.  It  is  one  of  the  functions  of  the 
State  to  see  that  all  localities  and  shippers  are  treated 
with  absolute  justice. 

There  is  no  mathematical  formula  by  which  "reason- 
able" rates  may  be  determined,  but  it  is  certain  that 
rates  cannot  be  fixed  lower  than  the  extra  cost  resulting 
from  the  performance  of  the  particular  services  for 
which  the  charges  are  made.  If  the  State,  or  any  other 
authority,  were  to  fix  rates  below  that  point,  it  would 
soon  destroy  the  value  of  the  railroad  property.  Nor 
can  the  railroad  charges  justly  be  greater  than  the 
value  of  the  service  to  the  shipper  or  traveler.  If  the 
railroads  made  the  rates  higher  than  the  value  of  the 

57 


58  MAKING  RATES  AND  FARES 

service,  the  inevitable  result  would  be  that  traffic  would 
fall  off. 

Thus  it  will  be  seen  that  the  minimum  rate  below 
which  the  railroad  charges  cannot  go  is  determined  by 
the  additional  cost  of  performing  a  particular  service; 
while  the  maximum  beyond  which  they  cannot  go  is 
fixed  by  the  value  of  the  service.  The  "reasonable  rate" 
lies  somewhere  between  these  two  extremes,  and  it 
"must  be  determined  for  each  class  of  traffic  or  each 
important  commodity  with  reference  to  measurable 
costs  of  service,  and  with  regard  to  the  value  of  the 
article."  It  will  be  readily  seen,  therefore,  that  the 
actual  fixing  of  rates  by  traffic  officials  and  their  regu- 
lation by  Government  authority  necessarily  depend 
upon  the  exercise  of  human  judgment.  They  are  not 
governed  by  mathematics. 

Importance  of  Freight  Rates. 

The  making  of  freight  rates  is  more  important  than 
the  fixing  of  passenger  fares,  and  the  conditions  gov- 
erning the  two  are  vastly  different.  It  is  much  easier 
to  fix  and  enforce  passenger  fares  than  it  is  to  deter- 
mine freight  rates,  while  the  policy  of  the  railroad  com- 
pany with  regard  to  the  latter  is  of  the  highest  im- 
portance. 

No  less  than  70  per  cent  of  the  total  income  of 
American  railroads  is  derived  from  the  freight  services, 
and  only  a  little  over  20  per  cent  from  passenger  busi- 
ness. The  other  10  per  cent  of  the  revenue  comes  from 
the  transportation  of  mail  and  express  and  from  "other 
sources." 


MAKING  RATES  AND  FARES  59 

The  first  step  in  freight  rate  making  is  the  classifi- 
cation of  freight.  Every  railroad  company  is  called 
upon  to  transport  thousands  of  different  kinds  of  arti- 
cles. It  is  therefore  necessary  to  group  these  articles 
into  a  limited  ntmiber  of  classes  and  to  base  the  rates 
as  far  as  possible  upon  classes  instead  of  upon  indi- 
vidual articles. 

Over  one-half  (54  per  cent)  of  the  great  volume  of 
traffic  carried  by  the  railroads  of  the  United  States  is 
made  up  of  minerals,  mainly  coal  and  iron  ore.  In  no 
other  country  of  the  world  is  the  mineral  traffic  so 
great  as  in  the  United  States,  and  as  this  traffic  must 
be  carried  at  low  freight  rates,  the  average  earning  of 
the  railroads  for  carrying  a  ton  of  freight  one  mile  is 
less  in  this  country  than  elsewhere.  Manufactures 
make  up  a  little  more  than  one-seventh  of  the  total 
tonnage,  forest  products  one-ninth,  and  agricultural 
products  one-twelfth.  These  four  commodities  consti- 
tute over  90  per  cent  of  the  total  traffic,  the  remainder 
being  made  up  of  animal  products,  general  merchandise 
and  miscellaneous  articles. 

Freight  Classification. 

In  these  few  groups  of  commodities  more  than  ten 
thousand  distinct  kinds  of  articles  are  included.  It 
would  be  impossible,  of  course,  to  make  a  rate  for  each 
of  the  ten  thousand  articles,  and  it  is  therefore  neces- 
sary to  group  the  articles  into  a  small  number  of 
classes  and  to  make  the  rates  vary  by  classes  in- 
stead of  by  articles.     It  is  also  necessary,  or  at  least 


60  MAKING  RATES  AND  FARES 

desirable,  that  the  railroad  should  give  lower  rates  on 
commodities  shipped  in  carloads  than  when  they  are 
handled  in  less  than  carload  lots.  These  conditions 
are  met  by  the  freight  classifications,  which  group  the 
commodities  into  from  ten  to  fourteen  classes,  giving 
to  most  articles  a  lower  classification,  and  therefore  a 
lower  rate,  when  they  are  shipped  in  carload  lots.  The 
methods  of  classification  are  treated  elsewhere.  (See 
chapter  on  "Classification  of  Traffic") 

Commadity  Tariffs. 

There  are  some  articles  of  freight,  however,  that  are 
not  included  in  the  general  classification.  These  are 
commodities  that  are  invariably  handled  in  carload 
quantities,  such  as  coal,  lumber,  livestock,  grain,  cement, 
and  other  bulky  freight.  Such  commodities  are  each 
given  what  is  called  a  "commodity  tariff  rate,"  and  they 
are  known  in  the  railroad  business  as  "ex-class  freight." 
The  number  of  commodities  thus  designated  is  quite 
large — about  1,500,  taking  the  country  as  a  whole — 
but  the  great  majority  of  articles  of  freight  are  in- 
cluded within  the  classifications. 

Rate-Making  Officials. 

The  making  of  freight  rates  is  a  task  belonging  to 
the  traffic  department  of  the  railroad,  headed  usually 
by  a  vice-president  of  the  company.  Under  this  official, 
in  a  large  company,  is  a  freight  traffic  manager  and  a 
passenger  traffic  manager.    The  general  freight  agent 


MorfU'  Freight  Tariff  No.  118- 


SECTION  No.  1 

{See  page  19  for  application) 

Item  No.  1.  CLASS  RATES 

Will  nofSpply  on  traffic  requiring  refrigerator  space  on  steamers 

On  shipments  for  which  no  commo^y  rate  is  named  in  SECTION  No.  2  to  points  designated  below^  the  to\- 

b.  9,  issued  by  F,  J.  HoSmaim, 


lowing  Class  Rates,  governed  by  Western  Classification  No.  51,  I.  C.  C. 
Agent,  supplements  thereto  and  reissues  thereof,  will  apply. 


FROM 


ARTICLES 

Minimum  wtleht.  Carloads,  30,000  pounds,  eu«pt  i 
ottunri**  provided  herein. 


HOTE— When  Tit  C.  H.  &  St.  P.,  By.,  Seattle  or  1 „.,  .._„., 

eicept  when  otherwise  provided  through  rates  named  will 
not  ipplyon pieces  7ei(hin(  over  10,000  lbs.  On  pieces  weigh. 
iniom  10,000  lbs.  export  rates  shown  to  Seattle,  Tacoma, 
Wash.,  will  be  applied,  plus  ocean  rates  named  in  Note  7. 

W^n  via  If.  St.  P.  &  S.  S.  M.  and  Canadian  Pacific  Rys.,  via 
Vancouver,  B.  C,  eicept  where  otherwise  provided,  through 
rates  named  will  not  apply  on  pieces  weighing  over  5,000 
lbs.,  or  measuring  12  feet  by  8  feet,  by  5  feet,  when  destined 
to  Sydney,  Aust.',  Suva,  Fiji  Islands  or  Auckland,  New  Zea- 
land, or  will  not  apply  on  places  weighing  over  10,000  lbs. 
or  measuring  U  feet  by  S  feet,  when  destined  to  Yokohama, 
Kobe,  Nagasaki,  Moji,  Japan;  Shanghai,  Hongkong,  China, 
or  Manila,  P.  I.  On  pieces  weighing  over  5,000  lbs.,  or  measur- 
ing 12  feet  by  8  feet,  by  5  feet,  when  destined  to  Sydney, 
Aust.,  Suva,  Fiji  Islands  or  Auckland,  New  Zealand,  and  on 
pieces  weighing  over  10,000  lbs.,  or  measuring  12  feet  by  8 
feet,  when  destined  to  Yokohama,  Kobe,  Nagasaki,  Moji. 
Japan;  Shanghai,  Hongkong,  China,  or  Manila,  P.  I.,  export 
rates  shown  to  Vancouver,  B.  C,  will  be  applied  plus  ocean 
rates  named  in  Note  13. 


HATES  IN  CENTS  PEE  100  LBS.  (Ei!eptajoSh»rwis>not»d) 


•a  tnrougn  to  (jsyi 

Kobe,  Nagaaakl,  Moji,  Japan, 

Shanghai,  Hongkong,  China; 


t»M^ 


V 


max 


When  destined  to  or  eonsign- 

-j  '■- ■-  to  Sydney,  Aus- 

■■■   ■  'inds; 


vTuvu  uesuBeu  m  or  consi 
•d  through  to  Sydney,  A 
trails:  ®Suva,  Fiji  Islan 
Auckland,  Naw  Sfnlind. 


Fiillslandi 
Auckland, 


i 


Four  Times  First  Class. 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Canc 
8.64 
8.40 


el— Combina 
14  40 
14.00 


Points 

Three  and  One-Half  Times  First  Class^  Points 

Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


#Canc 
7.66 
7.S5 


el — Combina 
12  60 
12.26 


will  apply 
14.40 
14.00 


Three  Times  First  Class. 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


fCanc 
6  48 
6.30 


el— Combina 
10.80 
10.50 


tion    rates 
7.20 
7.00 


willapp^y 
10.60 


Two  and  One-Half 


(Points 

Times  First  Class. .{Points 

iPoints 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Canc 

6  40 
6.26 


el— Combina 
9.00 
8.76 


Double  First  Class. 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Canc 
4.32 
4.20 


el— Combina 
7  20 
7.00 


One  and  One-Half 


Points 

Times  First  Class..  Points 

Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Cane 
3.24 
3.16 


el— Combina 
6  40 
5.25 


First  Class.. 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Canc 
2  16 
2  10 


el — Combina 

3.60 

3.60 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


4Cane 
1.86 
1.82 


-Combina 
3.10 
3.03 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
in  Group  C. 


«Canc 
1  56 
1.61 


el— Combina 
2  60 
2.62 


Fourth  Class. 


Points 
Points 
Points 


in  Group  A. 
in  Group  B. 
In  Group  O. 


fCanc 
1.32  . 
1.29 


-Combina 
2.20 
2  16 


tion    ratel 
6.00 
6.83 


will  applj 
8^76 


tion    rates 
4.80 
4.67 


« 


tion    rates 
3.60 
3.60 


will  apply 
6.40 
6.26 


tion    rates 
2.40 
2.33 


^vill  apply 
3.60 
3.50 


tion  rates 
2.07  • 
Sf.03 


will  apply 
3:03 


Hon    rates 
1.73 
1.68 


will  apply 
2.60 
2.62 


tion    rates 
1  47 
1  43 


will^p^ 
2  16 


♦Advance. 
@At  Yokohama,  Japan,  cargo  is  unloaded  direct  into  Customs- sheds  when  shipped  \'ia  Canadian  I'aciflo  Royal  Mail 

Steamers,  or  via  Toyo  Kaisha  Kisen  Steamers. 
@Rates  to  Suva,  F.  I.,  apply  via  Vancouvet,  B.  C  ,  in  connection  with  M.  St.  P.  &  S.  S.  M.  and  Can.  Pac.  Rys.. 
and  Canadian  Austrahan  Royal  Mail  Steamship  Co.,  only. 
For  explanation  of  abbreviations,  notes,  rules  and  application  of  rates,  refer  to  pages  16  to  21  ind. 


Sample  Page  of  Joint  Export  Tariff,  Section  1— Class  Rates  from 
Stations  in  Eastern  Territory  to  Pacific  Terminals  (Western  Classi- 
fication). 


62  MAKING  RATES  AND  FARES 

is  a  subordinate  of  the  former.  In  the  largest  systems 
the  work  is  subdivided  and  there  are  two  general  freight 
agents,  one  in  charge  of  local  traffic  and  the  other  of 
through  traffic.  Sometimes  there  is  a  third  agent  in 
charge  of  coal  traffic. 

The  general  freight  agent  is  the  official  who  actually 
makes  the  rates  and  prepares  and  issues  the  rate  sheets. 
These  are  signed  by  him  and  also  by  the  freight  traffic 
manager.  The  latter  controls  the  general  policy  of  rate 
making,  consulting  with  the  traffic  vice-president  on  im- 
portant questions  of  policy.  Only  the  most  vital  points 
of  traffic  policy  are  brought  to  the  attention  of  the 
president  and  board  of  directors. 

The  information  on  which  the  rates  are  based  is 
gathered  from  a  variety  of  sources,  including  the  divi- 
sion freight  agents  and  freight  solicitors.  Rate  making 
demands  a  knowledge  of  innumerable  details  regarding 
the  territory  to  be  served  and  the  actual  conditions  of 
business  therein. 

Making  Lacal  Freight  Rates. 

In  making  rates  on  local  traffic,  that  is,  traffic  local 
to  the  lines  of  any  one  company,  the  general  freight 
agent  prepares  and  issues  rate  sheets  without  reference 
to  competing  carriers.  All  rates  on  interstate  traffic 
must  be  filed  with  the  Interstate  Commerce  Commis- 
sion at  Washington  and  they  do  not  become  effective 
until  30  days  after  being  thus  filed.  In  the  case  of  the 
great  coal  carriers  the  making  of  coal  rates  is  one  of 
the  functions  of  the  general  coal  freight  agent,  the 


MAKING  RATES  AND  FARES  68 

method  of  procedure  being  similar  to  that  used  in  fix- 
ing charges  for  all  other  kinds  of  traffic. 

Mailing  Competitive  and  Through  Rates. 

In  fixing  competitive  and  through  rates,  the  rate 
sheets  are  not  issued  by  the  general  freight  agent  or 
traffic  manager  until  after  consultation  with  the  traffic 
officials  of  competing  railroads.  Meetings  of  the  va- 
rious traffic  associations  afford  an  opportunity  for  con- 
ferences in  regard  to  such  rates.  All  railroad  com- 
panies belong  to  one  or  more  of  these  associations. 
Since  1897,  when  the  United  States  Supreme  Court 
decided  that  the  fixing  of  competitive  and  through  rates 
by  the  traffic  associations  themselves  was  a  violation  of 
the  anti-trust  law,  it  has  been  necessary  for  each  rail- 
road company  to  act  independently  in  making  its  rates. 
But  competing  and  connecting  lines  are  usually  con- 
sulted and  the  rates  are  informally  fixed  at  the  meet- 
ings of  the  associations.  These  rates  are  then  pub- 
lished by  the  individual  companies.  No  attempt  is  now 
made,  as  prior  to  1897,  to  enforce  the  rate  agreements 
by  fines  and  penalties  assessed  by  the  traffic  associations 
against  offending  members. 

The  Percentage  Tariff  System. 

In  the  Central  Traffic  Association  territory  east  of 
the  Mississippi  and  north  of  the  Ohio  and  the  Potomac, 
the  through  rates  on  classified  traffic  over  competing 
lines  are  worked  out  by  taking  as  a  basis  the  rate  from 
Chicago  to  New  York  by  the  shortest  line.     Under 


64  MAKING  RATES  AND  FARES 

what  is  known  as  the  "percentage  tariff  system,"  east- 
bound  class  rates  to  New  York  from  points  other  than 
Chicago  are  fixed  percentages  of  the  rate  from  Chicago 
to  New  York.  Similarly,  on  west-bound  class  rates, 
the  rate  from  New  York  to  Chicago  is  taken  as  the 
basis,  and  the  rates  from  New  York  to  points  other 
than  Chicago  are  fixed  percentages  of  this  base  rate. 

The  Basing:  Point  System. 

Another  system  of  rate  making  prevails  in  the  terri- 
tory south  of  the  Ohio  and  east  of  the  Mississippi. 
This  is  known  as  the  "basing  point  system."  The  rate 
to  each  of  the  larger  cities  on  competing  roads  is  taken 
as  the  basis  of  the  rates  to  local  points  adjacent  to  such 
centers.  The  larger  cities  of  the  South  where  com- 
petition prevails  are  called  "basing  points,"  the  rates 
at  these  points  being  fixed  subject  to  the  competition 
of  alternate  routes.  The  rule  then  is  that  the  rate  from 
a  distance  to  local  towns  near  a  basing  point  city  is  the 
sum  of  the  rate  to  the  basing  point,  plus  the  local  tariff 
from  the  basing  point  to  the  local  town. 

Thus  the  freight  rate  from  Philadelphia  to  a  town, 
say  twenty-five  or  fifty  miles  from  Atlanta,  Ga.,  is 
the  rate  from  Philadelphia  to  Atlanta,  plus  the  rate 
from  Atlanta  to  the  nearby  town ;  and  should  this  town 
be  nearer  Philadelphia  than  Atlanta  is,  the  rate  is 
higher  than  that  to  Atlanta,  although  it  is  a  shorter 
haul.  While  this  seems  to  be  a  discrimination  against 
the  local  point,  it  has  been  held  to  be  legal  because 
of  the  greater  competition  at  Atlanta,  the  basing  point. 
This  system  of  rate  making  is  the  principal  feature  of 


MAKING  RATES  AND  FARES  65 

the  Southern  rate  policy,  and  applies  to  nearly  all  of 
the  Southern  territory. 

The  Blanket  System  of  Rate  Making. 

Competition  is  keen  for  traffic  taking  the  long  haul 
between  Atlantic  Coast  territory  and  the  Pacific  Coast 
region,  and  this  competition  is  of  two  kinds.  The  trans- 
continental railroads  actively  compete  for  this  business 
and  they  also  have  to  meet  the  competition  of  steam- 
ship lines  operating  between  the  two  seaboards.  This 
competition  has  been  intensified  by  the  opening  of  the 
Panama  Canal  to  commercial  traffic  (August,  1914). 

The  effect  upon  transcontinental  rates  is  two-fold: 
First,  a  lower  rate  is  given  from  points  east  of  the  Mis- 
souri River  to  the  Pacific  Coast  states  than  is  given 
to  places  on  the  way  west  situated  in  the  states  like 
Utah  and  Nevada,  immediately  east  of  the  Pacific  Coast 
states.  The  competition  of  steamship  lines  is  directly 
responsible  for  this  lower  rate  on  the  longer  haul  to 
the  Coast. 

Second,  the  rate  to  the  Pacific  Coast  terminals,  from 
Seattle  to  San  Diego,  is  the  same  from  all  points  east 
of  the  Missouri  River.  Thus,  on  nearly  all  classes  of 
freight  the  rate  from  New  York  to  San  Francisco  is 
no  higher  than  that  from  St.  Louis  or  Kansas  City. 

This  system  of  rate  making  is  known  as  "the  blanket 
system,"  the  entire  territory  east  of  the  Missouri  River 
being  covered,  or  "blanketed,"  by  the  same  west-bound 
rate. 

In  the  case  of  traffic  from  any  point  east  of  the 

I.  B.  L.  Vol.  t— 5 


aaec 


eug«fi«  Moffi*'  yyiqm  Ttfiw  Wo.  lie 


SECTION  No.  2— Continued 


PROM 


Obetpt  M  KoUd  Btl«w) 

ARTICLES 

vtUht,  CM-kMdi,  10,00 
•tharwlM  prorldfd  I 


.  .  knd  iMta*  or  TMomi. 
rhtrt  oUurtrlM  praridcd,  throulh  retw  nuMd 
•n  plMW  v«l«hlii|  OTW  10,000  lb*.  On  pi*eti 
0,0M  Um.  np«rt  r»t«  ihawn  to  Snttla,  Tuoma, 


irOT*-*lMB  fU  C.  ■.  *  St. 
Wish.,  taetpt  whtrt     ' 
wiU  iMt  (pplj  an    ' 
wal^l&lonrU.OI 
VmK..  will  bo  kppttod  plui .. 

WlMn  tto  M.  Bt.  r.  *  >.  1.  M.  qnit  OonsdUn  Pttiflo  Byi-.  Ti» 
VtacooTw,  B.  0^  uMpt  wh«r«  otlMnriM  prorldtd,  throuih 
rttoi  DMBOd  vffl  not  apply  on  vion*  w*i|hln|  oi«r  (,«00 
lb«.,  or  BMourlnl  U  foot  St  I  (Mt,  by  (  («ot,  whan  dwtlnad 
to  Srdnor,  Aoit.,  Bun,  rijl  Iitondi  or  AueUand,  N«w 
foobnd,  or  vUl  not  tppW  on  plooM  woiiOUni  onr  10,000 
Ibo.,  or  Bouurini  U  foot  br  I  foot,  vhen  daitibod  to  Toko- 
buw.  Kobo,  N»|*uU.  Mojl,  Japan;  Bbanihal  Honfkonf, 
China,  or  Manila,  r.  I.,  On  plocoa  w«l|hln|  *f«r  i,000  Iba., 
or  Moaaurini  U  faot  br  t  r*«t,  by  i  faot,  vhan  doatlnod  to 
■ydnoy,  Auat.,  BuTa,  Vljl  labnda  or  Auckland,  Ntw  Zoaland, 


by  •  toot,  whan  dtotinad  to  Tokobama,  Kob*,  Xagaaak 
mil,  Japan;  Shanfh^  Bonlkonf ,  China,  or  HanUa,  P.  I 
otpart  ratoa  ahawn  to  TanaouTar,  1.  C,  wUl  ba  appUad,  plu 


BATKS  IN  CKNT8  PBB  100  US.  (Inapt  aa  otborwlaa  notod) 


Whan  daatinad  to  or  eonaifn-  ,,    __        ._.^    ..  ,_ 

ad  throuih  to  (iiTgkohama.        When  daattnad  to  or  eonatin. 


BleyelM,  boiad  or  eraud.  aiin.  ,irt.  ao.ooo  lbs. 


ESi'ft   „ 

®Tokotkama, 
KoU,ira|iaaki, 
■oil,  Japan; 


"it    l«l 

HI  n 


fj 

^ 


Sydtaay 

Australia: 

^Suta, 

ruTbUnda; 

Auckland, 


Booto  And  Sho»i,  notothTwto«tp»clfle<l,  bond 


^BowUixf  Alley  TrMk»  or  rtoors  and  CvutUomt 


for  sBa«  and  ftaelu  for  r«tumlnf  Bi 

natie  Bowllnf  AlUyi  uxd  Tan  ?in  Spottors, 

K.  D.,  bosod  or  •raUd;Blie  Tan  Pins,  Balls 

and  Seor*  Boards ^..»»,„,^ 

^Provisioo  for  Bowling  Alley  T^ack  willapply 
n  of  etiono  of  traek  bolted  together.      . 


Butter,  Buttorlna,  OUotnartarina,  Bggs,  ChMM 
and  Drassed  Poultry  in  paekacas,  mln  wt. 
M,000  lbs.    Whan  for  rafrifarater  spaea  on 


Buttar  and  Buttarina,  In  tins,  boiad,  uln.  wt. 
84,000  lbs.    Whan  for  ordinary  stowafa  on 


Carbidaof  Calcium,  in  Tin  Cans,  boxed  or  in  itod 
drums,  minimum  wniRht  50,000  Ibg, 


Oannad  Ooods,  vis. :  Piih,  Prults  (not  PraoarTas) 

Maats  Ondudinf  Pettad  or  Darilad),  Vai 

tabUs,  l^kad  Macaroni  and  Cheaia,  Souj 


its  (no 
Maats  (Ineludinf  Pettad  or  Dariled),  Vaca- 
.  >akad  Macaroni  and  Cheese,  Soups. 
Breads  and  PuddinfS,  In  hermatieaUy  sealed 
eans,  boied.  Bin.  wt.  40.000  lbs 


C.  L 
L.  C.  L. 


L.<XL 


C.  L. 
L.C,L 


126.4 
120 


®@70 


—m 


i®, 


J® 


Canned  Meats,  or  Meat  In  flass,  hermetleall; 
sealed  (ineludlnc  Pott4  ~       -    -  - 
straight  or  mlied  C.  L., 


oetieally 

PotUd  or  DefOed),  boiad, 

wt.  40.000  lbs  „.. 


C.  L. 
L.C.  L 


Cards,  playing,  boiad,  mlnlBnim  weight  ao.OOO 
lbs L, . ^ 


Car  Springs,  C.L.^min.  wt.  70,000  Ibs^ 


Cash  Registers,  Cash  Register  Partes  and  Auto- 
matic Carriers,  boied,  mln.  wt.  24,000  lbs 

Note— Check  Paper  (for  Cash  Registers)  may  be 
shipped  in  mixed  carloads  with  Cash  Registern. 


C.L. 


L.  C.  L. 


- 

140| 


Cereal  Breakfast  Poods,  including  Plake  Maize 
and  Shredded  Wheat  Biscuit,  In  packages.. 


C.L. 
L.  C,  t 


Crackers,  Matsoa  and  Matsoa  Meal,  Cakes. 
Pruit  Biscuits,  Pretsels.  and  Toast  and 
®8hredded  Wheat  Bisenlt,  In  boxes  or  bar- 
rels, or  in  baskets  or  tubs  with  tight  wooden 
eoTsrs,  or  in  tin  eans,  eratad^ — ...,...^->. — 


C.L. 
L.,aL, 


IW     190 
147 


.         1 


^AdvaDoe.  •Reduction. 

@At  Yokohama,  Japan,  Cargo  is  unloaded  direct  into  Customs  sheds  wheO  shipped  via  Canadian  Pacific?  Royal  Mail 

Steamers,  or  via  Tokyo  Kisen  Kaisha  Steamers. 
®Rateo  to  Suva,  Fiji  Islaods,  apply  via  Vancouver,  B.  C,  io  conoecUon  with  M.  St.  P>  &  S.  S.  M.  aad  Qui.  Pafi. 

Ryo.  and  Canadian-Xustrahan  Royal  Mail  Steamship  Co.  Only. 
®Rates  named  in  this  item  will  not  apply  on  L»  C.  L.  shipmeots  of  Shreddet)  Wheat  Biscuit;  for  rates  refer  to 

it«m  No.  80. 
^Applies  only  in  connection  with  the  Bank  Line.  ®Rates  will  only  apply  to  Kobe,  Japan,  and  Manila,  P,  I, 

®Cancel— CIas»  rates  will  apply. 
Por  erplantion  of  abbrerlationi,  notes,  rules  and  appllestlon  of  rates,  rejf^r  to  pages  IB  to  21  in'cl.      , 


Sample  Page  of  Joint  Export  Tariff,  Section  2— Commodity  Rates 
from  Stations  in  Eastern  Territory  to  Pacific  Terminals  (Western 
ClassiBcation). 


MAKING  RATES  AND  FARES  67 

Missouri  River  to  an  intermediate  point,  say  a  town 
in  Nevada  east  of  the  Sierra  Nevada  Mountains,  the 
rate  is  fixed  according  to  the  following  rule:  To  the 
blanket  rate  from  the  eastern  point  of  shipment  to  the 
nearest  Pacific  terminal  add  the  local  rate  from  that 
terminal  to  the  Nevada  town.  Thus  again' we  see  that 
the  rate  for  the  shorter  haul  is  greater  than  that  for  the 
long  haul  to  the  Coast. 

On  east-bound  transcontinental  traffic  the  rates  are 
not  blanketed  over  so  large  an  expanse  of  territory  in 
the  East  as  they  are  on  traffic  moving  to  the  West. 
Local  or  distance  tariff  rates  prevail  from  the  Pacific 
terminals  to  points  on  the  Missouri  River,  and  all  places 
in  the  territory  between  the  Missouri  and  Mississippi 
rivers  pay  a  fixed  sum  or  differential  above  the  rate  to 
the  Missouri  River.  All  places  between  the  Mississippi 
River  and  Chicago  pay  the  same  differential  above  the 
rate  to  the  Mississippi.  For  points  between  Chicago 
and  Pittsburgh  the  rate  is  again  increased  by  a  fixed 
sum,  and  the  rates  to  points  between  Pittsburgh  and 
the  Atlantic  seaboard  are  a  fixed  amount  above  the 
rate  to  Pittsburgh.  It  will  therefore  be  seen  that  the 
rates  from  the  Pacific  Coast  to  points  east  of  the  Mis- 
souri River  are  in  reality  graduated  by  the  zone  sys- 
tem, with  which  the  country  has  been  familiarized  by 
the  operation  of  the  Parcel  Post. 

How  Passenger  Fares  Are  Fixed. 

The  making  of  passenger  fares  is  the  function  of 
the  general  passenger  agent  of  the  railroad,  who,  in 


68  MAKING  RATES  AND  FARES 

large  companies,  is  under  the  immediate  supervision  of 
a  passenger  traffic  manager.  The  general  passenger 
agent  decides  upon  and  issues  the  schedules  of  fares. 
If  these  apply  only  upon  the  local  lines  of  the  com- 
pany, they  are  usually  made  without  consulting  com- 
peting or  connecting  lines;  but  if  the  fares  apply  to 
competitive  traffic,  in  which  rival  lines  are  interested, 
such  fares  are  submitted  to  the  passenger  traffic  asso- 
ciation, through  which  they  are  considered  by  all  the 
lines  interested.  An  informal  agreement  being  reached 
by  the  members  of  the  association  in  interest,  the  gen- 
eral passenger  agent  then  files  the  rate  sheets  for  his 
company  with  the  Interstate  Commerce  Commission 
and  they  become  effective  at  the  expiration  of  thirty 
days.  Thus  the  action  of  each  company  in  rate  making, 
while  nominally  independent,  is  the  approved  result  of 
consultation  by  all  the  interested  lines. 

Special  fares  of  many  kinds,  including  commutation 
and  excursion  fares,  are  fixed  independently  by  each 
company  where  the  traffic  is  local  to  its  own  lines.  In 
the  case  of  convention  rates,  etc.,  involving  competing 
and  connecting  lines,  the  usual  course  of  consultation 
with  the  rival  companies  is  followed. 


CHAPTER  V. 

DOMESTIC  AND  FOREIGN  RATES. 

There  always  has,  and  always  will  be,  dissatisfaction 
with  railway  rates  for  both  passenger  and  freight  trans- 
portation. No  man  has  as  yet  been  able  to  devise  a 
generally  acceptable  tariff  in  either  line.  *  In  one  respect 
only  is  satisfaction  expressed,  and  this  is  because  the 
tendency  is  ever  downward. 

People  do  not  invest  their  money  in  the  construction 
of  railroads  or  other  transportation  lines  from  motives 
of  philanthropy.  The  one  all-dominant  question  prece- 
dent to  investment  is  "will  it  pay?"  In  this  connection, 
it  is  well  to  bear  in  mind  that  all  things,  transportation 
lines  as  well  as  babie«,  are  not  born  fully  developed. 
Railroads  have  their  periods  of  infancy,  in  which  they 
require  careful  nursing  the  same  as  children  do.  For 
this  reason  it  is  impracticable  to  treat  all  railroads,  the 
fully  developed  and  the  partly  developed,  alike. 

Rates  on  the  Pioneer  Roads. 

A  railroad  which  runs  through  a  wild,  sparsely  settled 
country  cannot  possibly  thrive  on  the  same  rates  which 
another  line  would  find  profitable  in  a  populous  terri- 
tory. 

Ample  illustration  of  this  is  to  be  had  in  the  history 
of  American  and  Canadian  railroading,  dating  from 
1830.  The  initial  lines  did  not  make  any  money  on  rates 
that  were  seven  and  one-half  times  higher  than  those 

69 


70  DOMESTIC   AND   FOREIGN   RATES. 

now  in  effect.  Large  as  these  rates  were,  however,  they 
tended  to  promote  the  building  up  of  communities,  until 
the  roads  not  only  did  a  profitable  business,  but  were 
enabled  by  reason  of  this  increase  of  business  to  keep 
on  making  reductions  in  their  rates.  Today  the  trans- 
portation lines  of  the  United  States  and  Canada  give 
a  better  service  for  less  money  than  is  to  be  found  in 
any  other  part  of  the  world.  The  charge  for  the  trans- 
portation of  passengers  and  freight  is  not  only  much 
less,  and  the  accommodations  much  better,  than  abroad, 
but  the  workmen  on  American  and  Canadian  railways 
are  much  better  paid  than  the  toilers  on  foreign  roads. 

As  Regar'ds  Passenger  Bates. 

Not  long  ago  William  J.  Bryan  made  a  trip  abroad, 
and  on  his  return  to  this  country  spoke  and  wrote  enter- 
tainingly on  conditions  abroad.  There  was  one  thing, 
however,  he  did  not  touch  upon,  and  that  was  railroad 
rates  and  wages.  In  commenting  upon  this  omission, 
Mr.  W.  C.  Brown,  president  of  the  New  York  Central 
lines,  says: 

"Mr.  Bryan  could  have  told  us  that  on  his  trip  from 
Liverpool  to  London,  a  distance  of  200  miles,  his  fare, 
including  150  pounds  of  baggage,  was  $5.50,  while  the 
fare  from  Boston  to  Albany,  201  miles,  is  $3.80.  He 
could  have  found,  by  inquiry,  that  the  engineers  who 
pulled  the  train  from  Liverpool  to  London  were  paid 
$2.00,  while  the  men  who  run  the  engines,  Boston  to 
Albany,  receive  $7.60  for  substantially  the  same  mile- 
age, with  firemen,  conductors  and  brakemen  all  receiv- 
ing fair  proportionate  pay." 


DOMESTIC   AND   FOREIGN   RATES.  71 

American  Vs.  English  Rates. 

Passenger  rates  in  the  United  States  are  24  per  cent 
less,  and  the  pay  of  trainmen  177  per  cent  higher,  than 
in  England.    Here  are  the  figures: 

Engineer  '■ 
Route.  Mileage.        Fare.  Pay. 

Liverpool-London 200  $5.50  $2.00 

Boston- Albany    201  3.80  7.60 

London-Edinburgh 400  13.92  6.00 

New  York- Buffalo  440  11.25  16.40 

In  Canada  the  rates  vary  from  an  average  of  1.054 
cents  per  mile  on  the  Canadian  Northern  of  Quebec 
(this  is  the  lowest)  to  9.427  cents  on  the  British  Yukon 
route.  The  average,  as  given  by  Mr.  J.  L.  Payne, 
comptroller  of  the  Department  of  Railways  and  Canals, 
is  1.921  cents  per  mile. 

Average  Rates  on  Leading  Lines. 

There  is  a  widespread  impression,  fostered  by  men 
who  are  quoted  as  authorities,  that  transportation  rates 
are  lower  abroad  than  on  the  American  continent.  In 
no  way  can  this  assertion  be  substantiated  except  by 
comparing  the  first-class  service  of  the  United  States 
and  Canada  with  the  third-class  service  abroad.  Fol- 
lowing will  be  found  a  fair  average  of  the  passenger 
rates  prevailing  in  various  prominent  countries: 

United  States — The  average  passenger  rate  on  the 
leading  railroads  is  2%  cents  a  mile.  This  is  for  serv- 
ice on  first-class  trains.  In  New  York  State  a  flat  rate 
of  2  cents  per  mile  is  in  force,  but  in  many  well-settled 
portions  of  the  country  a  3-cent  rate  prevails.  There 
are  some  sparsely  settled  sections  in  which  4,  and  even 


72  DOMESTIC   AND   FOREIGN   RATES. 

as  much  as  5,  cents  per  mile  is  charged.  On  the  other 
hand,  many  regular  patrons  of  railroads  are  carried  for 
1  cent  a  mile  through  the  use  of  commutation  tickets. 

English  and  French  Passenger  Rates. 

In  England  the  rates,  translated  into  the  equivalent 
of  American  money,  are  4  cents  per  mile  for  first  class ; 
2^4  cents  second  class,  and  2  cents  for  third  class.  There 
is  a  large  sale  of  special  rate  excursion  tickets,  but  the 
cheapest  regular  rate  for  the  lowest  class  of  service  is 
only  a  fraction  less  than  is  charged  on  the  American- 
Canadian  roads  for  the  best. 

French  roads  charge  4.7,  2%  and  1.6  cents  per  mile 
for  first,  second  and  third-class  accommodations.  In 
both  England  and  France  the  transportation  charge  for 
first-class  passengers  is  nearly  double  that  prevailing 
in  the  United  States  and  Canada. 

In  Prussia,  Austria  and  Hungary. 

Passenger  fares  in  Prussia  are  lower  than  in  Eng- 
land or  France,  and  yet  considerably  higher  than  in  this 
country.  The  average  is  3.06  cents  first  class,  2.3  cents 
second  class,  and  1.53  third  class.  There  is  a  still  lower 
rate — 0.77  cents — for  what  is  known  as  fourth-class 
service,  but  it  is  available  only  on  slow  trains. 

In  Hungary  and  Austria  the  zone  system  prevails, 
and  there  is  no  charge  by  the  mile.  On  through  traffic 
the  charge  for  Zone  No.  1  (fifteen  miles  or  less)  varies 
from  16.1  to  48.3  cents,  according  to  class.  This  would 
be  about  3  1/5  cents  per  mile  for  first-class  tickets.  In 
Zone  13,  distance  up  to  140  miles,  the  first-class  charge 


DOMESTIC   AND   FOREIGN   RATES.  79 

is  $6.76.  Here  we  have  an  increase  to  nearly  5  cents  a 
mile.  The  Austria-Hungary  tariff  is  evidently  compiled 
on  the  theory  that  people  who  can  afford  to  travel  con- 
siderable distances  must  pay  more  proportionately  than 
the  shorthaul  riders.  The  carriage  of  baggage  consti- 
tutes an  extra  charge. 

Cheap  Fares  in  India. 

India  offers  the  lowest  rate  of  passenger  transpor- 
tation in  the  world — ^the  charge  for  third-class  service 
is  one-half  cent  a  mile.  Few  civilized  people,  however, 
would  care  to  ride  on  the  third-class  India  trains. 
They  are  patronized  almost  exclusively  by  the  lower 
classes  of  natives.  The  trains  move  very  slowly,  and 
the  coaches  are  overcrowded,  without  regard  for  either 
decency  or  comfort. 

In  all  foreign  countries  the  bulk  of  the  passenger 
traffic  is  of  the  third-class,  and  the  average  haul  per  pas- 
senger is  comparatively  short.  In  the  United  States  and 
Canada  the  great  bulk  of  the  travel  is  first-class,  and 
journe3rs  of  from  500  to  1,000  miles  are  made  by  a 
larger  percentage  of  the  travelers  than  elsewhere. 

Freight  Rates  Also  Lower. 

To  even  greater  degree  the  same  conditions  hold  good 
as  regards  freight  rates.  In  no  other  part  of  the  world 
can  the  service  given  by  the  American-Canadian  lines  be 
duplicated  for  speed  and  cheapness.  It  is  impossible  to 
give  comparative  figures,  as  the  rates  are  made  solely 
on  classes,  and  the  articles  entering  into  the  make-up  of 
these  classes  vary  greatly  in  different  sections  of  the 
country. 


74  DOMESTIC   AND   FOREIGN   BATES. 

The  first-class  freight  rate  from  Chicago  to  New 
York,  a  distance  of  1,000  miles,  is  $15  per  ton.  This  is 
iy2  cents  per  ton  per  mile,  which  is  the  highest.  Grain 
is  carried  the  same  distance  for  $3.20  per  ton,  which  is 
about  one-third  of  a  cent  per  ton  per  mile. 

Freight  Rates  Going  Down. 

Mr.  Emory  R.  Johnson,  in  his  work  on  "American 
Railway  Transportation,"  gives  the  average  freight  rev- 
enue per  ton  per  mile  received  by  the  United  States 
railroads  in  1901  as  three-quarters  of  a  cent.  The  ten- 
dency is  ever  downward.  The  average  ton  mile  charge 
in  1901  was  barely  40  per  cent  of  that  in  effect  in  1871. 
From  1871  to  1881  there  was  a  decrease  of  one-third  in 
rates.    From  1881  to  1891  the  decrease  was  25  per  cent. 

The  lowest  rate  ever  known  was  in  1899,  when,  owing 
to  business  depression,  the  average  charge  per  ton  per 
mile  was  0.724  cent.  Now,  after  years  of  golden  pros- 
perity, it  is  about  0.750  cent. 

In  England  the  average  is  2  cents  per  ton  per  mile; 
France,  1.55  cents;  Germany,  1.42  cents;  Prussia,  2.30 
cents. 

Effect  of  Ten  Per  Cent  Increase. 

An  increase  in  freight  rates  is  always  made  the  subject 
of  protest  by  shippers  on  the  ground  that  it  will  force 
them  to  ask  a  higher  price  for  their  goods  than  con- 
sumers can  afford  to  pay.  Few  people,  however,  realize 
what  little  actual  difference  a  10  per  cent  advance  really 
makes. 

A  paper  company  at  Housatonic,  Mass.,  makes  a  cer- 
tain grade  of  paper  which  sells  at  $12  per  100  pounds. 


DOMESTIC    AND   FOREIGN    RATES.  75 

Freight  rates,  by  the  carload,  to  the  three  principal  dis- 
tributing points  are:  New  York,  15  cents;  Chicago,  35 
cents;  St.  Louis,  41  cents.  Suppose  these  rates  are  ad- 
vanced 10  per  cent.  The  freight  charge  would  then  be: 
New  York,  16.50  cents;  Chicago,  38%  cents;  St.  Louis, 
45.1-10  cents.  In  other  words,  a  10  per  cent  advance  in 
freight  would  add  1%  cents  to  the  price  of  the  $12  pack- 
age in  New  York,  3I/2  cents  in  Chicago,  and  4  1-10 
cents  in  St.  Louis. 

Hardly  Noticeable  to  Consumer. 

Federal  statistics  show  that  the  average  annual  ex- 
penditure for  food,  clothing  and  fuel  by  a  -family  of  five 
persons  is  $446.  Of  this  $9.90  represents  freight  paid 
for  transporting  the  various  materials  from  the  produc- 
ing points.  An  increase  of  10  per  cent  in  freight  rates 
w  ould  add  99  cents  a  year,  less  than  one-third  of  a  cent 
per  day,  to  the  living  expenses  of  this  family  of  five 
persons. 

An  increase  of  10  per  cent  in  freight  rates  would 
amount  to  an  extra  charge  of  one  cent  on  any  of  the 
following  shipments. 

22  1-5  lbs.  dressed  beef,  Chicago  to  New  York. 
33  1-3  lbs.  ham  or  bacon,  Chicago  to  New  York. 
33  1-3  lbs.  lard,  Chicago  to  New  York. 
55  lbs.  canned  fish,  Boston  to  St.  Louis. 

6  2-3  doz.  eggs,  Iowa  to  New  York. 
12  1-2  qts.  milk,  northern  New  York  to  New  York. 

8  qts.  cream,  northern  New  York  to  New  York. 
33.1-3  lbs.  sugar.  New  York  to  St.  Louis. 
33  1-3  lbs.  coffee,  New  York  to  St.  Louis. 


76  DOMESTIC   AND   FOREIGN   RATES. 

11  1-3  lbs.  tea,  New  York  to  St.  Louis. 
55 1-2   lbs.   breakfast  food.  Battle   Creek  to   New 
York. 

3  gals,  whiskey,  Peoria  to  New  York. 
40  lbs.  flour,  Minneapolis  to  New  York. 
11  suits  clothes,  Boston  to  New  York. 

2  suits  clothes,  Boston  to  St.  Louis. 

2  suits  ladies'  clothes,  Boston  to  Chicago  or   St. 
Louis. 

13  1-3  pairs  gloves,  Gloversville  to  New  York. 
83  1-3  yards  woolen  cloth,  Boston  to  New  York. 
18  yards  woolen  cloth,  Boston  to  Chicago. 
15  yards  woolen  cloth,  Boston  to  St.  Louis. 
20  pairs  shoes,  Boston  to  New  York. 


CHAPTER  VI. 
CLASSIFICATION  OF  TRAFFIC, 

All  carriers,  water  lines  as  well  as  railways,  classify 
the  freights  they  handle  in  transit  as  much  as  possible, 
although  the  water  lines  are  not  so  particular  in  this 
respect  as  the  rail  lines.  This  classification  is  made  on 
the  bulk  and  value  of  the  articles  to  be  transported. 
All  freight  charges  are  supposed  to  be  based  on  the 
actual  weight  of  the  goods  carried,  but  there  are  in- 
stances in  which  strict  adherence  to  one  set  scale  of  a 
certain  charge  per  100  pounds  would  be  manifestly  un- 
fair. In  most  cases  it  would  affect  the  carriers  in- 
juriously by  not  giving  them  reasonable  pay  for  the 
service  they  perform;  in  other  cases  the  shippers  would 
suffer  by  being  compelled  to  pay  more  than  a  fair 
charge  for  the  carriage  of  their  goods. 

Why  Classifioation  is  Made. 

The  expense  of  hauling  a  freight  car  is  a  known, 
definite  quantity.  So  is  the  capacity  of  a  car — the  aver- 
age car  has  a  capacity  of  about  40,000  pounds  of  grain, 
say  666  bushels  of  wheat.  There  are  many  commodi- 
ties, like  certain  forms  of  unfinished  furniture,  for  in- 
stance, that  would  fill  up  the  entire  space  of  the  car  and 
yet  not  weigh  much,  if  anything,  over  one-half  what  the 
wheat  does.  If  the  freight  rate  were  fixed  on  an  un- 
yielding scale  at  so  much  per  100  pounds,  the  shipper 
of  the  wheat  would  be  compelled  to  pay  for  the  trans- 

77 


78  CLASSIFICATION    OF   TRAFFIC. 

portation  of  his  carload  just  double  what  the  furniture 
shipper  did,  and  yet  the  margin  of  profit  to  the  pro- 
ducer on  the  latter  would  be  much  the  greatest. 

How  Discrimination  is  Avoided. 

If  the  set  schedule  of  charges  per  100  pounds  were 
so  arranged  as  to  make  a  fair  rate  for  the  transporta- 
tion of  the  carload  of  furniture,  then  the  shipper  of  the 
wheat  could  justly  claim  that  he  was  being  discrimi- 
nated against  in  the  matter  of  rates.  If,  on  the  other 
hand,  the  charges  should  be  based  on  the  wheat  solely 
and  made  to  apply  to  all  other  traffic  regardless  of 
weight,  bulk  or  value,  the  railway  would  find  itself 
hauling  many  cars  1,000  miles  for  one-half  what  it 
charged  for  hauling  other  cars  for  the  same  distance. 
Here  again  we  would  have  discrimination  in  another 
form.  It  was  to  do  away  with  this  possibility  of  dis- 
crimination, to  equalize  rates  and  make  them  fair  to 
all  shippers,  that  the  classification  system  was  adopted. 

The  most  radical  of  railway  advocates  do  not  claim 
that  the  classification  system  is  perfect;  the  existence 
of  errors  and  imperfections  is  admitted,  but  these  are 
gradually  being  weeded  out. 

Proper  Classification  a  Hard  Problem. 

The  construction  of  a  classification  list  that  will  be 
fair  to  all  concerned  is  one  of  the  hardest  problems  in 
railroading.  In  a  way,  this  classification  is  made  on 
the  basis  of  "what  the  traffic  will  stand,"  and  yet  this 
is  not  a  fair  way  to  describe  it.  A  transportation  com- 
pany in  making  a  schedule  of  rates  would  consider: 


CLASSIFICATION   OF   TRAFFIC.  79 

1.  The  competition  of  other  roads. 

2.  The  total  volume  of  business. 

3.  The  direction — ^that  is,  of  loaded  trains  or  empty 
trains. 

4.  The  value  of  the  article. 

5.  The  bulk  and  weight. 

6.  The  risk  of  transportation. 

7.  The  facilities  for  loading  and  unloading. 

8.  The  special  equipment,  if  any,  necessary. 

Locality  a  Ruling  Factor. 

Locality  is  an  important  factor  in  classification,  the 
idea  being  to  encourage  and  develop  traffic  in  some 
particular  product  incident  to  a  certain  territory.  There 
are  now  three  general  and  distinct  freight  classifications, 
known  as  the  "Official,"  the  "Southern"  and  the  "West- 
ern," each  constructed  with  a  view  to  building  up  busi- 
ness in  the  territory  to  which  it  applies.  The  "Official" 
covers  traffic  from  Chicago  east  and  northeast;  the 
"Southern"  covers  the  entire  South,  and  the  "Western" 
all  the  field  west  and  northwest  of  Chicago. 

Division  of  Freight  Into  Classes. 

As  a  rule,  each  classification  schedule  is  divided  into 
six  classes,  known  as  first,  second,  third,  fourth,  fifth 
and  sixth.  A  commodity  rated  as  first  class  in  one  of 
the  three  schedules  may  be  second  or  even  third  class 
in  the  others;  it  is  entirely  a  matter  of  local  impor- 
tance. Thus  grain  is  the  all-controlling  factor  in 
Western  classification,  while  in  the  South  cotton  is  the 
chief  commodity.  In  both  instances  the  rate  is  fixed  by 
special  commodity  tariflfs. 


80  CLASSIFICATION    OF   TRAFFIC. 

The  Matter  of  Extra  Rates. 

Rates  are  based  on  classification,  those  on  first-class 
freight  being  the  highest  and  those  on  sixth  class  the 
lowest.  In  addition  to  the  rates  on  classification  there 
is  often  a  penalty  in  the  way  of  extra  charge.  Manure 
and  fertilizer  spreaders,  when  set  up  ready  for  use,  are 
rated  as  1^2'  This  means  that  the  charge  for  trans- 
portation is  one  and  one-half  times  the  first-class  rate. 
This  is  because  a  set-up  spreader  is  very  bulky  in  pro- 
portion to  its  weight,  and  if  charged  for  at  the  first- 
class  rate  only,  would  not  give  the  company  a  fair  return 
for  transportation. 

The  same  spreaders,  "knocked  down,"  are  carried 
at  third-class  rates  because  more  weight  can  be  loaded 
into  the  same  car  space.  The  difference  between  first 
and  third-class  rates  is  about  33  1/3  per  cent. 

Illustration  of  the  System. 

Under  the  arrangement  100  spreaders,  "knocked 
down,"  could  be  shipped  a  certain  distance  for  say  $10. 
The  freight  charges  on  100  spreaders  set  up  and  car- 
ried the  same  distance  would  be  fully  $22.50.  Why? 
Simply  because  the  set-up  spreaders,  while  weighing 
no  more  than  those  "knocked  down,"  would  occupy  a 
great  deal  more  car  space.  Under  this  latter  condition 
the  transportation  company  would  get  no  pay  for  the 
use  of  a  lot  of  car  space  which,  under  the  present  classi- 
fication system,  is  utilized  to  advantage. 

Rates  on  Carload  Lots. 

All  classification  rates  are,  of  course,  based  on  car- 
load lots.    In  the  matter  of  determining  what  a  carload 


CLASSIFICATION    OF   TRAFFIC.  81 

is,  the  matter  of  weight  rules.  For  certain  kinds  of 
goods  there  is  a  minimum  of  12,000  pounds.  For 
others  the  minimum  runs  up  to  40,000.  The  general 
average  is  24,000.  Minimum  weight  means  that  in 
order  to  secure  carload  rates  charges  must  be  paid  on 
the  minimum  named,  regardless  of  any  shortage  in 
weight. 

It  is  thus  made  impossible  for  a  shipper  to  get  car- 
load rates  on  a  basis  of  24,000  pounds  to  a  car,  load 
only  20,000  pounds  and  pay  charges  on  the  actual 
weight  of  the  shipment.  If  he  obtains  a  carload  rate  he 
must  pay  on  the  minimum  weight  capacity  of  that  car 
despite  the  fact  that  he  does  not  use  it. 

Rates  Fixed  by  Classification. 

The  recent  prevailing  rates  in  the  Official  Classifi- 
cation of  freights  between  New  York  and  Chicago, 
per  100  pounds,  were  as  follows: 

First  class,  75  cents. 
Second  class,  65  cents. 
Third  class,  50  cents. 
Fourth  class,  35  cents. 
Fifth  class,  30  cents. 
Sixth  class,  25  cents. 

Exceptions  are  made  in  classification  rates  where  the 
bulk  of  traffic  warrants  this  course.  Wheat,  for  in- 
stance, is  in  class  4.  Instead  of  charging  the  full  class 
rate  of  35  cents  per  100  pounds,  however,  the  lines  make 
a  special  rate  of  16  cents,  or  less  than  one-half.  Corn 
and  other  cereals  are  handled  in  the  same  way.    When 

I.B.L.  Vol.  8—6 


82  CLASSIFICATION   OF   TRAFFIC. 

the  grain  is  intended  for  export,  the  rate  is  still  further 
reduced  to  13  cents. 

How  ClassiiiQation  is  Fixed. 

In  making  up  a  classification,  as  already  explained, 
the  transportation  men  keep  in  mind  three  vital  points, 
viz. :  Weight,  bulk  and  value.  In  this  connection  must 
also  be  considered  ease  in  handling,  risk  of  loss  or  dam- 
age in  transit,  etc.  It  would  be  impossible  to  give  a 
classification  list  in  detail  owing  to  the  volume  of  space 
required,  but  a  fair  idea  may  be  had  from  the  following 
items,  the  rate  of  transportation  per  100  pounds  by 
the  carload  being  for  the  haul  between  Chicago  and 
New  York. 

Article.                                                              Class.  Carload.  Eate. 

Cotton  1  36,000  75c 

Corn  huskers   2  24,000  65c 

Harrows  K.  D 3  24,000  50c 

Harvester  wire   4  24,000  35c 

Metal  bedsteads  5  30,000  30c 

Subdivisions  in  Classification. 

All  the  important  items  of  freight  traffic  are  sub- 
divided into  numerous  classes,  each  taking  a  different 
classification  and  consequently  a  different  rate,  and  fre- 
quently varying  greatly  as  to  the  minimum  weight  per 
carload.  The  item  of  glass  furnishes  a  good  illustration 
of  this  subdivision. 

Article.                                                                          Class.  Weight. 

Leaded — boxed  3  to  1  24,000  lbs. 

Plate— boxed 1  24,000  lbs. 

Rough— N.  O.  S.* 4  36,000  lbs. 

Window — ^boxed   1  36,000  lbs. 

*Not  otherwise  specified. 


CLASSIFICATION   OF   TRAFFIC.  83 

This  same  subdivision  occurs,  to  greater  or  lesser  ex- 
tent, in  nearly  every  item  in  vrhich  there  is  any  consider- 
able amount  of  traffic.  In  the  handling  of  furniture 
there  are  290  separate  and  distinct  subdivisions.  Many 
of  the  articles  enumerated  are  rated  in  the  same  class, 
but  they  are  treated  separately. 

Decision  of  Minimum  Capacity. 

All  calculations  as  to  the  minimum  weight  capacity 
are  based  upon  the  standard  car  of  36-foot  length. 
Three  per  cent  of  this  capacity  is  added  for  each  addi- 
tional foot  of  length,  and  3  per  cent  subtracted  for  each 
foot  of  shortage.  Fractions  of  six  inches  or  less  are 
not  taken  into  consideration.  All  calculations  are  made 
on  the  inside  measurement  of  the  cars.  The  minimum 
load  must  not  be  under  91  per  cent  of  the  full  capacity. 

The  exact  weight  of  carload  capacity  depends  upon 
the  nature  of  the  freight.  All  modern  36-foot  cars 
are  constructed  to  carry  a  maximum  load  of  30,000 
pounds.  The  minimum  load  of  such  a  car  on  a  91- 
per  cent  basis  would  be  27,300  pounds. 

What  Classifioation  Does. 

There  are  many  goods,  however,  a  full  carload  of  • 
which  would  not  weigh  27,000  pounds,  or  anything  Hke 
it.  A  carload  of  some  materials  will  not  run  over 
8,000  pounds,  and  if  there  was  no  grading  of  freights 
a  railway  would  be  hauling  cars  with  the  earning  ca- 
pacity of  each  differing  widely.  One  carload  of  30,000 
pounds,  at  35  cents  per  100  pounds,  would  bring  the 
road  $105,  while  another,  travelling  the  same  distance. 


84  CLASSIFICATION    OF   TRAFFIC. 

but  carrying  only  8,000  pounds,  would  earn  consider- 
ably less  than  one-third  of  $105.  It  was  to  abolish  this 
inequality  that  the  classification  system  was  adopted. 
Such  trouble  or  discontent  as  may  exist  is  not  due 
to  the  classification  system,  but  to  misuse  of  it.  Many 
shippers  claim,  and  justly,  that  they  are  compelled  to 
pay  exorbitant  charges  by  reason  of  the  wrong  classi- 
fication of  their  products,  but  this  is  a  matter  which  is 
gradually  being  corrected. 


CHAPTER  VII. 
UNIFORM  BILL  OF  LADING. 

For  many  years,  in  fact  from  the  inception  of  rail- 
roading in  1830,  right  up  to  1904,  there  was  much 
dispute  between  rail  carriers  and  shippers  as  to  the 
terms  upon  which  freight  would  be  received  and  trans- 
ported. Each  road  had  its  own  bill  of  lading,  and  very 
few  of  them  were  alike. 

These  bills  of  lading,  as  a  rule,  were  ambiguously 
worded  with  the  purpose  of  minimizing  the  liability  of 
the  carriers  and  throwing  responsibility  for  safe  car- 
riage, as  much  as  possible,  on  the  shipper.  This  am- 
biguity gave  rise  for  grave  doubt  as  to  the  actual  mean- 
ing of  some  of  the  important  clauses,  and  expensive 
actions  at  law  were  common. 

First  of  the  Uniform  Bill. 

By  1904  discontent  had  become  so  widespread  and 
assumed  such  organized  form  among  shippers,  that  the 
railroads  were  forced  to  yield  to  the  demand  for  one 
uniform,  clearly  worded  bill  of  lading,  which  would  be 
fair  to  shipper  and  carrier  alike,  and  as  to  the  meaning 
of  which  there  could  be  no  reasonable  doubt. 

Through  the  instrumentality  of  the  Interstate  Com- 
merce Commission,  and  by  agreement  between  carriers, 
shippers  and  bankers, — these  latter  being  interested  be- 
cause they  cash  drafts  with  bills  of  lading  attached — 

85 


86  UNIFORM    BILL   OF   LADING. 

adoption  of  a  satisfactory  uniform  bill  was  first  made 
in  Official  classification  territory.  Since  then  it  has 
been  generally  adopted. 

Great  Advantage  to  Shipper. 

The  advantage  in  this  change  to  the  shipper  is  greater 
than  to  anyone  else.  Under  the  old  arrangement,  the 
conditions  governing  the  handling  of  shipments  were 
different,  in  the  Central  Freight  Association  territory, 
from  those  current  in  the  Eastern  Association.  These 
again  differed  from  those  of  the  New  England  Associa- 
tion, and  they  were  all  different  from  the  association 
of  rate  lines.  A  shipment  going  any  distance  traversed 
more  than  the  confines  of  any  one  of  these  associations, 
and  it  became  a  general  custom  to  use  a  receipt  stamped 
or  printed  with  the  information  that  the  initial  carrier 
received  the  shipment  subject  to  the  conditions  of  its 
own  bill  of  lading  only. 

Trouble  With  Old  Form. 

These  conditions  in  turn  provided  that  the  initial 
carrrier  was  responsible  for  loss  only  while  the  ship- 
ment was  in  its  possession,  and  that  it  was  authorized 
by  the  shipper  to  turn  over  the  shipment  to  connecting 
lines,  subject  to  conditions  of  that  line's  bill  of  lading. 
When  anything  happened  to  the  shipment  through 
being  lost,  destroyed,  or  damaged  in  any  way,  it  made 
it  necessary  to  refer  to  the  contract  under  which  it  was 
being  carried.  There  was  great  trouble  in  store  for  the 
shipper;  first  to  find  out  how  and  where  the  loss  or 
damage  occurred;  in  whose  hands  the  responsibihty  lay; 


UNIFORM   BILL  OF  LADING.  87 

and  just  what  the  conditions  were  that  governed  the 
responsibihty. 

Removes  Opportunities  for  Delay. 

Opportunities  for  delay  on  the  part  of  the  carrier 
in  adjusting  were  multiplied  by  these  comphcations, 
and  the  outcome  of  suits,  brought  to  enforce  payment 
of  claim,  were  m.ade  doubtful  in  the  extreme.  Such 
was  the  condition  that  stirred  the  various  associations 
of  commerce  and  manufacturers'  associations  to  keep 
the  agitation  up  until  their  action  was  successful  in 
getting  the  uniform  bill  absolutely  required  in  the  Offi- 
cial classification  territorj^,  where  the  shippers  are 
strongest,  financially  and  numerically. 

In  order  to  insure  uniformity,  the  Interstate  Com- 
merce Commission  has  authorized  railroads  to  make  an 
increase  of  10  per  cent  in  carriage  charges  on  shipments 
presented  on  forms  other  than  the  uniform. 

Forms  in  General  Use. 

The  straight  forms  which  all  railroads  now  issue  to 
customers  are  the  straight  uniform  bill  of  lading, 
exactly  as  used  in  the  Official  classification  territory. 
The  dispensing  of  rate  tickets,  freight  receipts,  etc., 
was  a  long  step  in  advance  itself.  The  use  of  a  uniform 
bill  of  lading  gives  the  shipper  a  biU  of  lading  for  abso- 
lutely every  shipment  he  makes,  and  a  specification  or 
complete  contract  setting  forth  all  the  conditions  that 
surround  the  responsibility  for  that  shipment  from  the 
time  it  starts  until  it  arrives  at  its  destination. 

It  was  difficult  at  first  to  get  the  roads  to  consent 


88  UNIFORM    BILL   OF   LADING. 

to  the  use  of  this  form,  but  now  that  its  advantages 
have  been  shown  it  is  doubtful  whether  any  of  them 
would  willingly  consent  to  its  abandonment. 

Features  of  Uniform  Bill. 

There  is  now  no  room  for  dispute  as  to  whether  a 
certain  bill  of  lading  was  issued  for  a  particular  ship- 
ment. Under  the  new  order  a  bill  of  lading  is  always 
issued  for  every  shipment,  the  idea  being  that  the  origi- 
nal shall  be  retained  by  the  shipper,  and  a  copy,  which 
is  a  complete  transcript  of  the  contract  under  which 
the  shipment  is  made,  sent  to  the  consignee  as  his  memo- 
randum and  record.  Every  shipper  has  experienced 
difficulty  in  the  settlement  of  claims,  because  of  his 
inability  to  present  a  bill  of  lading  to  the  claim  agent. 
In  the  attempt  to  secure  one,  much  time  is  wasted,  and 
the  shipper  often  learns  that  all  he  gets  is  a  copy  of 
the  shipping  receipt,  so  that  he  must  begin  over  again 
for  a  second  time  to  secure  a  bill  of  lading,  all  of  which 
is  annoying.  This  is  now  obviated  by  the  uniform  bill 
of  lading. 

Advantages  in  Banking  Deals. 

The  new  bills  are  of  the  utmost  importance  to  bankers 
who  loan  millions  of  dollars  annually  on  shipment  of 
fruit  of  all  kinds,  grain,  cotton,  etc.,  while  on  the  way 
to  market.  In  many  cases  the  shipper  draws  against 
the  shipment,  and  the  new  form  gives  the  banker  assur- 
ance that  he  has  good  security  for  his  money  with- 
out employing  an  expert  to  scan  and  interpret  the  dif- 
ferent forms  of  bills  of  lading,  as  there  is  only  one 
form,  and  the  banker  has  a  copy  of  that. 


UNIFORM   BILL   OF   LADING. 


89 


ntai 

Railroad  Company. 


STRAIGHT  BILL  OF  LADING-ORIGINAL— NOT   NEGOTIABLE. 


RECEIVED,  subject  to  the  cUssifications  and  teriSs  ta  effect  on  the  date  of  t»ue  of  this  Ongin»J  BiH  of  Ledinc 


(from the  property  described  below,  in  apptmit  good  otder,  aeeptf 

M  noted  (contents  and  condition  of  contents  of  packages  anknown),  marked,  consigned  and  destined  aa  incfiMted  bek>w,  whieli 
B&id  Company  agrees  to  carry  to  its  ustial  place  of  ddivery  at  said  destination,  if  on  its  road,  otberwiae  to  deliver  to  aaothtr 
carrier  on  the  route  to  said  destination.  It  is  mut^ially  agreed,  as  to  each  carrib'  of  all  or  any  of  ssid  propeitjr  orer  tU  or 
«ny  portion  of  said  route  to  destination,  and  as  to  each  party  at  any  time  interested  in  aQ  or  any  of  satd  proptTty,  that 
every  service  to  be  performed  hereunder  shall  be  subject  to  all  the  conditions,  whether,  printed  or  writtoo,  berein  <— ^'■wrj 
Including  conditions  on  back  bereoQ  and  which  are  a^i«ed  to  by  the  shipper  and  accepted  for  himMlf  and  bis  i    ' 


The  Rate  of  Fraght  fronk. 


^_ 

-is  in  Cents  per  100  Lbe.                         f    i»%«w 

p^^nmrnitt  autOm 

ir  MCtaM 

IFMCI*» 

VVkOMi 

ataOMal  xrc>M*A   ifci.«b 

IFdaiC 

If  CUa  D      IF  CU«'  B  '     *" 

1 

'  (Had  A<kb.ii-)U  far  ..PM.  ./ Ui^T- 

CotiaiKned  lc_™ - ■■        . ...-» .-^ 

OMination,. 
Route,..- 


State  of- 


xOoQaty  of....- 


..- Car  Initial — .. ^ Car   No 


So. 
Va«kac« 

Docription  of  Aitickaand  Special  Karks. 

Weight 

CtaMor 
JUt» 

CbMk 
Cataam 

If   chaii^  an  to  be 



~    ~ 

crTrs  ?»s?i! 

■•—- — 

Reeeived  t. 

to  aopiy  in    prepayment 
ot    the   efaarnt   oik    the 
property  described 

z 

THIS  rOBM  TO  BE  PBDiTED 
ON  -WHin?*  rAJKS. 

'" 

. 

a*M«OHM« 

.  ...  ^    . 

*-     < 

- 

ChaiseB  Advasoed: 

$ . 

-Stopper. 


Uniform  Bill  of  Lading  Now  in  General  Use  by 
All  the  Railroads. 


90  UNIFORM    BILL   OF   LADING. 

Conditions  of  Uniform  Bill. 

The  terms  of  the  contract  thus  made  between  ship- 
per and  carrier  are  printed  in  detail  on  the  back  of 
each  bill,  so  that  everybody,  shipper,  consignee,  or 
banker,  who  has  a  copy  of  the  bill  of  lading  for  any 
particular  lot  of  freight,  knows  the  exact  condition 
under  which  shipment  was  made.  These  conditions  are 
as  follows: 

Sec.  1.  The  carrier  or  party  in  possession  of  any  of  the  property  herein 
described  shall  be  liable  for  any  loss  thereof  or  damage  thereto,  except  as 
hereinafter  provided. 

No  carrier  or  party  in  possession  of  any  of  the  property  herein  described 
shall  be  liable  for  any  loss  thereof  or  damage  thereto  or  delay  caused  by 
the  act  of  God,  the  public  enemy,  quarantine,  the  authority  of  law,  or  the 
act  or  default  of  the  shipper  or  owner,  or  for  differences  in  the  weights  of 
grain,  seed,  or  other  commodities  caused  by  natural  shrinkage  or  discrep- 
ancies in  elevator  weights.  For  loss,  damage,  or  delay  caused  by  fire  occur- 
ring after  forty-eight  hours  (exclusive  of  legal  holidays)  after  notice  of  the 
arrival  of  the  property  at  destination  or  at  port  of  export  (if  intended  for 
export)  has  been  duly  sent  or  given,  the  carrier's  liability  shall  be  that  of 
warehouseman  only.  Except  in  case  of  negligence  of  the  carrier  or  party  in 
possession  (and  the  burden  to  prove  freedom  from  such  negligence  shall  be 
on  the  carrier  or  party  in  possession),  the  carrier  or  party  in  possession  shall 
not  be  liable  for  loss,  damage,  or  delay  occurring  while  the  property  is 
stopped  and  held  in  transit  upon  request  of  the  shipper,  owner,  or  party 
entitled  to  make  such  request;  or  resulting  from  a  defect  or  vice  in  the 
property  or  from  riots  or  strikes.  When  in  accordance  with  general  custom, 
on  account  of  the  nature  of  the  property,  or  when  at  the  request  of  the 
shipper  the  property  is  transported  in  open  cars,  the  carrier  or  party  in 
possession  (except  in  case  of  loss  or  damage  by  fire,  in  which  case  the  liabil- 
ity shall  be  the  same  as  though  the  property  had  been  carried  in  closed  cars) 
shall  be  liable  only  for  negligence,  and  the  burden  to  prove  freedom  from 
such  negligence  shall  be  on  the  carrier  or  party  in  possession. 

Limits  to  Carrier's  Liability. 

Sec.  2.  In  issuing  this  bill  of  lading  this  company  agrees  to  transport 
only  over  its  own  line,  and  except  as  otherwise  provided  by  law  acts  only  as 
agent  with  respect  to  the  portion  of  the  route  beyond  its  own  line. 

No  carrier  shall  be  liable  for  loss,  damage  or  injury  not  occurring  on  its 
own  road  or  its  portion  of  the  through  route,  nor  after  said  property  has 
been  delivered  to  the  next  carrier,  except  as  such  liability  Is  or  may  be 
imposed  by  law,  but  nothing  contained  in  this  bill  of  lading  shall  be  deemed 
to  exempt  the  initial  carrier  from  any  such  liability  so  imposed. 

Sec.  3.  No  carrier  is  bound  to  transport  said  property  by  any  par- 
ticular train  or  vessel,  or  in  time  for  any  particular  market  or  otherwise 
than  with  reasonable  dispatch,  unless  by  specific  agreement  indorsed  hereon. 
Every  carrier  shall  have  the  right  in  case  of  physical  necessity  to  forward 


UNIFORM   BILL   OF   LADING.  91 

said  property  by  any  railroad  or  route  between  the  point  of  shipment  and 
the  point  of  destination;  but  if  such  diversion  shall  be  from  a  rail  to  a 
water  route  the  liability  of  the  carrier  shall  be  the  same  as  though  the 
entire  carriage  were  by  rail. 

The  amount  of  any  loss  or  damage  for  which  any  carrier  is  liable  shall 
be  computed  on  the  basis  of  the  value  of  the  property  (being  the  bona-fide 
invoice  price,  if  any,  to  the  consignee;  including  the  freight  charges,  if 
prepaid)  at  the  place  and  time  of  shipment  under  this  bill  of  lading,  unless 
a  lower  value  has  been  represented  in  writing  by  the  shipper  or  has  been 
agreed  upon  or  is  determined  by  the  classification  or  tariffs  upon  which  the 
rate  is  based,  in  any  of  which  events  such  lower  value  shall  be  the  maximum 
amount  to  govern  such  computation,  whether  or  not  such  loss  or  damage 
occurs  from  negligence. 

Claims  for  loss,  damage,  or  delay  must  be  made  in  writing  to  the  carrier 
at  the  point  of  delivery  or  at  the  point  of  origin  within  four  months  after 
delivery  of  the  property,  or  in  case  of  failure  to  make  delivery,  then  within 
four  months  after  a  reasonable  time  for  delivery  has  elapsed.  Unless 
claims  are  so  made  the  carrier  shall  not  be  liable. 

Any  carrier  or  party  liable  on  account  of  loss  of  or  damage  to  any  of 
said  property  shall  have  the  full  benefit  of  any  insurance  that  may  have 
been  effected  upon  or  on  account  of  said  property,  so  far  as  this  shall  not 
avoid  the  policies  or  contracts  of  insurance. 

Necessary  Repairs  and  Shipper's  Risk. 

Sec.  4.  All  property  shall  be  subject  to  necessary  cooperage  and  baling 
at  owner's  cost.  Each  carrier  over  whose  route  cotton  is  to  be  transported 
hereunder  shall  have  the  privilege,  at  its  own  cost  and  risk,  of  compressing 
the  same  for  greater  convenience  in  handling  or  forwarding,  and  shall  not 
be  held  responsible  for  deviation  or  unavoidable  delays  in  procuring  such 
compression.  Grain  in  bulk  consigned  to  a  point  where  there  is  a  railroad, 
public,  or  licensed  elevator,  may  (unless  otherwise  expressly  noted  herein, 
and  then  if  it  is  not  promptly  unloaded)  be  there  delivered  and  placed  with 
other  grain  of  the  same  kind  and  grade  without  respect  to  ownership,  and 
if  so  delivered  shall  be  subject  to  a  lien  for  elevator  charges  in  addition 
to  all  other  charges  hereunder. 

Charges  for  Storage  and  Detention. 

Sec.  5.  Property  not  removed  by  the  party  entitled  to  receive  it  within 
forty-eight  hours  (exclusive  of  legal  holidays)  after  notice  of  its  arrival 
has  been  duly  sent  or  given,  may  be  kept  in  car,  depot,  or  place  of  delivery 
of  the  carrier,  or  warehouse,  subject  to  a  reasonable  charge  for  storage  and 
to  carrier's  responsibility  as  warehouseman  only,  or  may  be,  at  the  option 
of  the  carrier,  removed  to  and  stored  in  a  public  or  licensed  warehouse  at 
the  cost  of  the  owner  and  there  held  at  the  owner's  risk  and  without  liabil- 
ity on  the  part  of  the  carrier,  and  subject  to  a  lien  for  all  freight  and 
other  lawful  charges,  including  a  reasonable  charge  for  storage. 

The  carrier  may  make  a  reasonable  charge  for  the  detention  of  any 
vessel  or  car,  or  for  the  use  of  tracks  after  the  car  has  been  held  forty-eight 
hours  (exclusive  of  legal  holidays),  for  loadmg  or  unloading,  and  may  add 
such  charge  to  all  other  charges  hereunder  and  hold  such  property  subject  to 
a  lien  therefor.  Nothing  in  this  section  shall  be  construed  as  lessening  the 
time  allowed  by  law  or  as  setting  aside  any  local  rule  affecting  car  service 
or  storage. 


92  UNIFORM    BILL   OF   LADING. 

Property  destined  to  or  taken  from  a  station,  wharf,  or  landing  at  which 
there  is  no  regularly  appointed  agent  shall  be  entirely  at  risk  of  owner  after 
unloaded  from  cars  or  vessels  or  until  loaded  into  cars  or  vessels,  and  when 
received  from  or  delivered  on  private  or  other  sidings,  wharves  or  landings 
shall  be  at  owner's  risk  until  the  cars  are  attached  to  and  after  they  are 
detached  from  trains. 

Articles  of  Extraordinary  Value. 

Sec.  6.  No  carrier  will  carry  or  be  liable  in  any  way  for  any  documents, 
specie,  or  for  any  articles  of  extraordinary  value  not  specifically  rated  in  the 
published  classification  or  tariffs,  unless  a  special  agreement  to  do  so  and  a 
stipulated  value  of  the  articles  are  indorsed  hereon. 

Sec.  7.  Every  party,  whether  principal  or  agent,  shipping  explosive  or 
dangerous  goods,  without  previous  full  written  disclosure  to  the  carrier  of 
their  nature,  shall  be  liable  for  all  loss  or  damage  caused  thereby,  and  such 
goods  may  be  warehoused  at  owner's  risk  and  expense  or  destroyed  without 
compensation. 

Sec.  8.  The  owner  or  consignee  shall  pay  the  freight  and  all  other  lawful 
charges  accruing  on  said  property,  and,  if  required,  shall  pay  the  same 
before  delivery.  If  upon  inspection  it  is  ascertained  that  the  articles  shipped 
are  not  those  described  in  this  bill  of  lading,  the  freight  charges  must  be 
paid  upon  the  articles  actually  shipped. 

Diversion  to  Water  Route, 

Sec.  9.  Except  in  case  of  diversion  from  rail  to  water  route,  which  is 
provided  for  in  section  3  hereof,  if  all  or  any  part  of  said  property  is 
carried  by  water  over  any  part  of  said  route,  such  water  carriage  shall  be 
performed  subject  to  the  liabilities,  limitations  and  exemptions  provided 
by  statute  and  to  the  conditions  contained  in  this  bill  of  lading  not  incon- 
sistent with  such  statutes  or  this  section,  and  subject  also  to  the  condition 
that  no  carrier  or  party  in  possession  shall  be  liable  for  any  loss  or  damage 
resulting  from  the  perils  of  the  lakes,  sea,  or  other  waters;  or  from  explo- 
sion, bursting  of  boilers,  breakage  of  shafts,  or  any  latent  defect  in  hull, 
machinery,  or  appurtenances;  or  from  collision,  stranding,  or  other  accidents 
of  navigation,  or  from  prolongation  of  the  voyage.  And  any  vessel  carrying 
any  or  all  of  the  property  herein  described  shall  have  the  liberty  to  call  at 
intermediate  ports,  to  tow  and  be  towed,  and  assist  vessels  in  distress,  and 
to  deviate  for  the  purpose  of  saving  life  or  property. 

The  term  '* water  carriage"  in  this  section  shall  not  be  construed  as 
including  lighterage  across  rivers  or  in  lake  or  other  harbors,  and  the 
liability  for  such  lighterage  shall  be  governed  by  the  other  sections  of  this 
instrument. 

Sec.  10.  Any  alteration,  addition  or  erasure  in  this  bill  of  lading  which 
shall  be  made  without  an  indorsement  thereof  hereon,  signed  by  the  agent 
of  the  carrier  issuing  this  bill  of  lading,  shall  be  without  effect,  and  this 
bill  of  lading  shall  be  enforceable  according  to  its  original  tenor. 

Enables  Shippers  to  Get  Money. 

Suppose  a  Chicago  shipper  has  started  a  lot  of  grain 
for  New  York  and  does  not  want  to  wait  for  his  money 


UNIFORM    BILL   OF   LADING.  93 

until  the  grain  reaches  New  York,  is  sold,  and  the 
draft  in  payment  is  mailed  back  to  Chicago.  In  the 
ordinary  course  of  business  this  would  mean  a  lapse 
of  nearly  two  weeks  or  more.  The  uniform  bill  of 
lading  makes  possible  a  much  more  expeditious  process. 
It  is  even  possible  for  a  shipper  to  get  his  money  for 
a  shipment  on  the  day  it  is  loaded. 

Armed  with  a  bill  of  lading  showing  the  grain  is 
actually  in  the  custody  of  the  raiboad,  the  shipper 
makes  a  draft  on  the  consignee  in  New  York  for  the 
marked  value  of  the  shipment.  He  attaches  this  draft 
to  the  bill  of  lading  and  presents  it  at  his  bank,  which 
honors  his  check  against  the  collateral  thus  deposited. 

Bankers  Disliked  Old  Method. 

While  it  was  possible  to  do  business  of  this  kind 
under  the  old  system,  bankers,  as  a  rule,  did  not  favor 
is  because  of  the  lack  of  uniformity  in  the  various  bills 
of  lading,  and  the  wide  difference  in  the  conditions 
under  which  they  were  issued.  Where  financial  accom- 
modation was  extended  in  this  manner,  it  was  more  on 
account  of  the  financial  standing  and  responsibility  of 
the  people  concerned,  than  on  the  actual  security  of  the 
bill  of  lading. 

Where  merchandise  or  grain  was  shipped  over 
a  route  composed  of  two  or  three  different  roads 
with  conflicting  bill  of  lading  conditions  there  was 
too  much  doubt  and  uncertainty  as  to  responsibility 
in  case  of  loss  to  make  the  cashing  of  drafts  on  this  kind 
of  collateral  inviting. 


94  UNIFORM    BILL   OF   LADING. 

How  Bankers  are  Secured. 

When  a  transaction  of  this  nature  is  made  under  the 
new  system  the  bill  of  lading  is  of  what  is  known  as  the 
"order"  form.  Allow  that  a  shipment  of  grain  has  been 
forwarded  to  the  firm  of  John  Peters  &  Co.,  New  York, 
a  draft  against  which  is  to  be  cashed  by  the  First 
National  Bank  of  Chicago.  The  order  bill  of  lading 
will  show  that  the  grain  is  consigned  to  the  order  of  the 
First  National  Bank,  and  that  the  railroad  is  to  notify 
John  Peters  &  Co.  of  its  arrival  in  New  York.  On 
receipt  of  this  notice  Peters  &  Co.  make  arrangements 
with  the  New  York  correspondent  of  the  First  National 
Bank  to  take  up  the  draft.  When  this  is  done  the  bill 
of  lading,  properly  endorsed,  is  turned  over  to  Peters 
&  Co.,  who  present  it  to  the  railroad  company  and  re- 
ceive the  grain. 

This  gives  the  bank  protection  because,  until  Peters 
&  Co.  have  paid  the  draft,  the  bank  holds  possession  of 
the  bill  of  lading,  without  the  delivery  of  which  the  rail- 
road will  not  surrender  the  grain. 

Milled-in-Transit  Bills. 

Another  form  of  the  uniform  bill  of  lading — ^the  gen- 
eral conditions  are  the  same  in  all — is  the  milled-in- 
transit  bill.  To  illustrate  its  operation  let  us  take  the 
following  purely  suppositious  instance: 

The  through  rate  on  grain  from  Hastings,  Neb.,  to 
Chicago  is  35  cents  per  100  pounds.  The  local  rate 
from  Hastings  to  Omaha,  plus  the  rate  from  Omaha  to 
Chicago,  is  considerably  more  than  the  through  rate. 
M  owns  a  mill  at  Omaha.    He  has  bought  a  lot  of  wheat 


UNIFORM    BILL   OF   LADING.  95 

at  Hastings,  which  he  is  under  contract  to  dehver  in 
Chicago  as  flour.  Instead  of  paying  the  local  rate  on 
the  wheat  from  Hastings  to  Omaha,  and  making  a  new 
shipment  of  the  flour  to  Chicago,  he  ships  the  wheat 
from  Hastings  through  to  Chicago  on  a  "milled-in- 
transit"  bill  of  lading. 

Benefit  to  the  Miller. 

Under  the  special  terms  of  this  form  M,  while  obtain- 
ing the  benefit  of  the  Hastings-Chicago  rate,  has  the 
privilege  of  stopping  his  wheat  at  Omaha,  grinding  it, 
and  then  reshipping  it  to  Chicago.  If  it  were  not  for 
this  privilege  of  milling  in  transit  M  would  have  to  pay- 
some  miller  in  Chicago  for  grinding  the  wheat  while  his 
own  mill  stood  idle. 

The  effect  of  this  milled-in-transit  privilege  has  been 
to  build  up  milling  interests  along  the  lines  of  railway 
away  from  the  large  centers  like  Minneapolis.  If  it 
were  not  for  this  milled-in-transit  privilege  it  would  be 
impossible  for  any  of  the  smaller  mills  to  do  anything 
but  a  purely  local  business. 

Necessity  for  Bill  of  Lading. 

In  ordinary  mercantile  business,  the  bill  of  lading  rep- 
resents the  culmination  of  a  sale — the  receipt  for  goods 
shipped,  and  is  naturally  an  important  document.  It 
would  be  just  as  reasonable  for  a  merchant  to  give  out 
money  without  taking  a  receipt  as  to  make  shipment  of 
goods  without  a  bill  of  lading.  A  simple  receipt  would 
not,  however,  be  entirely  satisfactory,  as  it  would  not 
show  the  conditions  under  which  the  shipment  was  made. 


96  UNIFORM    BILL   OF   LADING. 

the  liability  assumed  by  the  carrier  beyond  that  im- 
posed by  common,  State  or  Federal  law,  nor  the  charges 
which  might  be  assessed  by  the  carrier  for  the  service. 

A  bill  of  lading  contains  specific  conditions  showing 
to  a  scientific  nicety  the  responsibility  of  the  carrier, 
terms  under  which  the  shipment  is  accepted,  and  the 
rate  that  shall  be  charged,  and  gives  in  full  all  terms, 
requirements  or  stipulations.  In  brief,  the  bill  of  lading 
is  a  contract  between  the  shipper  and  the  carrier. 


CHAPTER  VIII. 

PRIVATE  OAKS  AND  FAST  FREIGHTS. 

Many  large  shippers,  especially  those  in  the  slaugh- 
tering and  packing  business,  find  it  a  convenience  to 
own  their  own  cars.  In  the  prompt  handling  of  fresh 
meats  and  similar  products  this  private  car  system  has 
become  a  virtual  necessity.  It  does  away  with  doubt 
as  to  obtaining  a  supply  of  cars  when  needed,  and  ren- 
ders the  shipper  independent  of  the  railroad  in  this 
respect.  It  also  minimizes  the  opportunity  for  a  rail- 
road to  handicap  certain  shippers  by  withholding  cars 
on  the  plea  of  shortage,  while  at  the  same  time  favor- 
ing others  by  furnishing  them  with  all  the  cars  needed. 
Before  the  introduction  of  the  private  car  system,  there 
were  many  abuses  of  this  nature,  and  it  was  possible 
to  destroy,  or  greatly  injure,  the  business  of  any  shipper 
toward  whom  a  railroad  might  conceive  a  disUke. 

Rates  on  Private  Car  Shipments. 

Owners  of  private  cars  are  supposed  to  pay  the  same 
rates  as  shippers  who  use  the  ordinary  railway  cars,  but, 
as  recompense  for  the  use  of  their  own  cars,  these 
owners  are  allowed  a  mileage  rebate.  In  the  East,  the 
railways  allow  three-quarters  of  a  cent  per  mile  for  the 
use  of  a  private  refrigerator  car.  In  the  West  the 
allowance  is  one  cent  a  mile.  On  a  trip  from  Chicago 
to  New  York  the  owner  of  a  private  car  would  thus 
have  an  advantage  of  $7.50  in  freight  charges  over  a 

x.B.L.  Vol.  8—7  ^T 


M  PRIVATE   CARS   AND   FAST   FREIGHTS. 

shipper  using  the  ordinary  railway  car.  Against  this 
saving  of  $7.50  the  car  owner  must  figure  the  interest 
on  his  investment,  etc. 

The  system  has  its  favorable  and  unfavorable  fea- 
tures, both  as  regards  carriers  and  shippers.  The 
strongest  protest  made  against  it  is  that  it  tends  to 
give  a  larger  shipper  with  ample  capital  an  undue  ad- 
vantage over  his  smaller  competitor,  who  cannot  afford 
to  own  his  own  cars.  While  it  is  true  that  the  owners 
of  private  cars  get  their  hauling  done  at  a  lower  rate 
than  the  non-owner  can  obtain,  it  is  doubtful  whether 
this  saving  much  more  than  offsets  the  cost  of  the  in- 
vestment. The  great  real  economy  would  seem  to  be 
in  the  increased  efficiency  of  service. 

Of  Benefit  to  Railroads. 

Under  the  old  system,  when  railroads  had  to  furnish 
all  the  cars  required  in  the  service,  investment  of  an 
enormously  large  amount  of  money  in  car  equipment 
was  necessary.  This  has  been  materially  lessened  by  the 
use  of  private  cars.  Not  that  the  roads  are  spending  less 
for  cars  than  formerly — they  are  spending  far  more. 
But,  they  are  not  buying  anything  like  the  number  of 
cars  they  would  have  to  if  so  many  of  the  large  shippers 
did  not  own  private  cars. 

How  large  an  item  this  is  may  be  readily  estimated 
from  the  fact  that  in  Chicago  alone  there  are  eight 
large  packing  establishments  which  own  their  own  cars, 
and  send  them  out  in  trainloads  daily.  The  same  condi- 
tions prevail  in  other  large  cities  like  New  York,  Bos- 
ton, Philadelphia,  Cincinnati,  Cleveland,  Minneapolis, 
Kansas  City,  St.  Louis,  Denver  and  San  Francisco, 


I»RIVATE    CARS   AND   FAST   FREIGHTS.  99 

Railway  statisticians  place  the  total  number  of  private 
cars  in  the  United  States  at  close  to  200,000,  which  is 
about  7  per  cent  of  the  total  engaged  in  American 
railway  traffic. 

Evil  of  Car  Detention. 

The  larger  the  number  of  private  cars  in  use  on  a 
given  hne  of  railway  the  less  will  that  road  suffer  from 
car  detention  by  other  lines.  This  matter  of  car  deten- 
tion is  one  of  the  most  serious  problems  railway  men 
have  had  to  contend  with.  Under  the  old  system,  the 
Erie  would  send  out  a  car  from  New  York,  bound  for 
some  point  in  Ohio.  Here  it  might  be  impressed  into 
service  by  an  Ohio  road  and  sent  to  some  Southern 
point,  where  in  turn  a  Southern  road  would  use  it.  By 
persistent  "tracing"  it  might  be  in  time  located  and 
recovered. 

There  is  such  a  thing  as  cars  dropping  out  of  sight 
entirely  and  never  being  heard  of  again.  There  are 
other  instances  in  which  cars  started  from  Xew  York  for 
Buffalo  have  been  located  at  obscure  stations  in  Mon- 
tana. 

New  Per  Diem  Detention  Rate. 

Railroads  which  thus  impress  the  cars  of  another 
road  into  use  are  supposed  to  pay  one-sixth  of  a  cent 
per  mile  for  their  use,  but  in  many  instances  they  don't 
do  it.  Missing  cars  have  been  found  in  service  as  stor- 
age houses,  in  which  capacitj^  they  had  served  for 
months.  The  mileage  traveled  was  comparatively 
small,  so  the  amount  to  be  collected  at  one-sixth  of  a 


100  PRIVATE    CARS   AND   FAST   FREIGHTS. 

cent  per  mile  was  insignificant  and  did  not  begin  to  pay 
the  owning  railroad  for  the  loss  of  car  service. 

This  has  led  railroads  to  substitute  a  per  diem,  in- 
stead of  a  mileage  charge,  for  detained  cars.  When  a 
road  dehvers  a  car  into  the  keeping  of  another  road  a 
fixed  charge,  generally  of  twenty  cents  a  day,  is  made 
for  every  day  the  car  is  detained.  There  can  be  no 
evasion  of  this  charge  by  the  receiving  road.  It  is  re- 
sponsible for  it  regardless  of  where  the  car  may  wander, 
and  as  a  consequence  it  is  to  the  interest  of  such  roads  to 
return  all  cars  promptly. 

This  per  diem  charge  has  also  put  an  effectual  stop 
on  the  practice  of  some  roads  in  allowing  their  patrons 
to  retain  the  cars  of  other  roads  as  storage  places  with- 
out charge.  The  roads  must  pay  detention  charges,  and 
naturally  they  are  going  to  get  the  cars  back  to  theii* 
owners  as  soon  as  possible. 

Private  Oars  Not  Detained. 

Private  cars  are  not  subject  to  detention  in  this  way. 
The  sign  of  ownership  painted  on  the  sides  is  too  promi- 
nent. Ordinary  railway  cars  are  also  thus  labeled,  but 
to  see  a  car  bearing  the  ownership  sign  of  the  Pennsyl- 
vania road  standing  at  a  way  station  on  a  far  Western 
line  would  occasion  no  comment,  as  interchange  of  cars 
is  an  unavoidable  incident  of  railroading. 

The  sight  of  a  car  bearing  the  business  sign  of  Ar- 
mour &  Co.,  in  use  at  some  out-of-the-way  place,  where 
the  firm  has  no  connection,  would  soon  set  every  tongue 
in  the  neighborhood  to  wagging.  Besides  this,  there 
would  be  no  chance  for  diversion  of  this  sort  except  by 


PRIVATE    CAKS   AND   FAST   FREIGHTS.  101 

outright  theft,  as  the  comity  of  interchange  of  car  serv- 
ice between  railroads  does  not  extend  to  private  cars. 

One  Source  of  Abuse. 

There  is  one  grave  danger  in  the  private  ownership 
of  cars.  It  is  possible  to  so  manipulate  the  mileage 
records  as  to  give  the  owner  of  these  cars  a  much  lower 
freight  rate,  aside  from  his  lawful  car  mileage,  than  can 
be  obtained  by  competitors  who  use  the  ordinary  cars. 
If  numerous  complaints  are  well  founded,  discrimina- 
tion of  this  kind  is  not  uncommon. 

The  man  who  owns  a  private  car  is  entitled  to  a  mile- 
age rebate  for  its  use.  He  saves  the  railroad  the  use  of 
one  of  its  own  cars,  thus  releasing  it  for  other  service. 
It  is  therefore  no  more  than  right  that  he  should  be 
paid  for  the  use  of  his  own  car.  But  the  rate  of  pay- 
ment must  be  equitable;  so  arranged  that,  when  due 
allowance  is  made  for  the  investment,  the  actual  charge 
for  freight  haulage  shall  be  the  same  to  car  owner  and 
non-car  owner.  Whether  this  is  accomplished  by  the 
present  Eastern  allowance  of  three-quarters  of  a  cent 
per  mile  is  problematical. 

The  One  Great  Advantage. 

Aside  from  the  opportunity  for  favoritism  in  the  mat- 
ter of  freight  rates,  private  ownership  of  cars  has  one 
all-important  advantage — it  enables  a  shipper  to  move 
his  product  with  certainty.  The  big  packer,  with  100 
carloads  of  perishable  beef  to  move,  is  no  longer  at  the 
mercy  of  the  freight  agent  of  the  P.  X.  &  Z.  Railroad, 
who  may  feel  inclined  to  say:  "Sorry,  Mr.  Packer,  but 
it  is  an  absolute  impossibility  to  give  you  100  cars.    I 


102  PEIVATE   CARS   AND   FAST   FREIGHTS. 

might  be  able  to  squeeze  out  10,  but  even  this  is  doubt- 
ful." 

Mr.  Packer  now  ices  and  loads  his  own  cars,  delivers 
them  to  the  P.  X.  &  Z.  road,  and  the  latter  has  nothing 
to  do  except  furnish  the  motive  power.  There  is  a 
time  schedule  for  such  trains  and  they  move  with  the 
regularity,  if  not  the  speed,  of  the  best  express  trains. 
There  is  no  stopping  at  way  stations  to  load  or  unload 
freight.  No  stops  of  any  kind,  except  for  fuel  and 
water  and  to  change  engines.  Under  these  conditions 
it  is  not  uncommon  for  a  train  to  make  the  run  from 
Chicago  to  New  York  in  forty  hours,  or  less. 

Origin  of  the  Private  Car. 

Private  car  ownership  grew  out  of  the  fast  freight 
service.  In  the  early  days  of  railroading,  private  cars 
and  special  trains  were  unknown.  Even  when  the  trans- 
portation business  had  grown  to  such  proportions  that 
a  shipper  occasionally  loaded  one  or  more  cars  with  his 
own  product  such  a  thing  as  making  special  runs  with 
these  cars  were  unheard  of.  They  were  hauled  on  the 
ordinary  trains,  subject  to  all  the  delays  of  way  traffic. 

It  was  then  the  practice  to  load  cars  promiscuously, 
without  regard  to  the  saving  of  time  en  route.  One 
car  might  contain  shipments  for  a  dozen  or  more  sta- 
tions, and  a  stop  would  have  to  be  made  at  each  for 
unloading,  as  well  as  loading,  purposes.  All  freight 
trains  were  moved  on  practically  the  same  schedule,  and 
it  was  not  a  very  fast  one. 

Finally  some  genius  conceived  the  idea  of  sorting  the 
freight,  loading  it  into  cars  according  to  destination  and, 
when  this  destination  was  reached,  dropping  the  ear 


PRIVATE    CARS    AND    FAST    FREIGHTS.  108 

there  instead  of  holding  the  entire  train  while  the  freight 
for  that  station  was  sorted  out. 

First  of  Fast  Freight  Lines. 

This  was  the  beginning  of  the  fast  freight  service. 
Companies  like  the  Empire,  the  JMerchants'  Despatch, 
and  numerous  others,  were  organized.  These  companies 
bought  their  own  cars,  arranged  with  the  railroads  for 
fast  trains,  and  were  thus  able  to  offer  shippers  of  first- 
class  freight  advantages  in  the  way  of  time-saving,  etc., 
which  could  not  be  obtained  in  the  ordinary  freight  serv- 
ice. The  fast  freight  lines  made  a  good  profit  by  the 
increased  charge  which  their  fast  trains  warranted,  and 
this  profit  was  increased  by  the  rebate  mileage  which 
the  railroads  allowed  for  the  use  of  the  cars. 

This  fast  freight  service  was  popular  with  the  ship- 
pers from  the  start.  The  saving  of  time  was  an  impor- 
tant item,  and  in  many  instances  more  than  counter- 
balanced the  increased  charge  for  transportation. 
Where  several  New  York  shippers  had  a  lot  of  mer- 
chandise for  Cleveland  it  would  be  loaded  into  one  car 
and  sent  through  without  being  held  up  at  the  inter- 
mediate way  stations. 

Victory  of  Private  Car  Men. 

The  plan  worked  so  well  that  the  big  shippers,  men 
who  send  out  produce  by  the  trainload,  became  interested, 
and  those  who  had  the  business  to  warrant  it  and  the 
capital  to  operate  with,  began  to  use  their  own  cars. 
There  was  serious  objection  to  this  at  first.  In  many 
instances,  the  fast  freight  lines  were  nothing  less  than 
auxiliaries  to  the  railroads,  their  financial  interests  being 


104  PRIVATE   CAES  AND   FAST  FEEIGHTS. 

largely  identical.  For  a  time,  the  railroads,  because  of 
their  interest  in  the  fast  freight  lines,  were  not  willing 
to  give  the  private  car  owners  equal  privileges  as  to 
mileage  rebates  and  train  service,  and  a  merry  war  re- 
sulted. It  ended  in  the  complete  surrender  of  the  rail- 
roads, the  courts  holding  that,  as  common  carriers,  they 
could  not  be  permitted  to  discriminate  between  patrons 
who  tendered  exactly  the  same  class  of  business. 

Fast  Freight  Lines  Increasing. 

Despite  the  large  number  of  cars  now  owned  by  ship- 
pers the  fast  freight  Unes  are  more  numerous  and  offer 
a  more  extended  service  than  ever.  While  the  number 
of  privately  owned  cars  is  large,  the  number  of  shipper- 
owners  is  comparatively  small.  On  the  other  hand,  the 
number  of  people  who  are  unable  to  own  their  own  cars, 
but  who  desire  a  similar  service,  is  increasing  every  year, 
and  it  is  to  these  that  the  fast  freight  lines  cater.  There 
is  business  enough  for  all. 


CHAPTER  IX. 
SOME  TRANSPORTATION  PROBLEMS. 

Next  to  agriculture,  the  transportation  business  of 
this  country  is  first  in  importance.  It  has  been  esti- 
mated that  over  one-fifth  of  the  wealth  of  the  United 
States  is  invested  in  railroads.  In  1915  they  em- 
ployed directly  over  1,848,000  men,  and  for  services 
alone  paid  out  $2,915,000,000  annually,  while  the  total 
annual  disbursements  amounted  to  nearly  twice  as 
much;  and  yet  ninety  years  ago  the  locomotive  was 
unknown,  and  nowhere  in  the  world  did  a  railroad  exist. 

In  1832  there  were  only  299  miles  of  railroad  in  the 
United  States,  while  today  there  are  over  377,000  miles 
of  track.  It  is  said  a  man  will  carry  66  pounds  twelve 
miles  per  day  over  bad  roads;  a  horse  will  carry  440 
pounds ;  a  locomotive  will  haul  350,000  pounds  a  greater 
distance  in  an  hour  at  a  cost  of,  say,  half  one  cent  per 
ton  per  mile.  One  may  readily  see  the  strides  made  in 
transportation,  and  almost  measure  the  progress  of 
civihzation  by  it. 

Rates  Sboujd  be  Stable. 

The  United  States,  with  only  one-twelfth  the  world's 
population,  has  fully  one-half  of  all  the  railway  mileage 
of  the  globe.  One  can  ship  freight  and  personally  travel 
farther  for  less  money,  receive  better  service,  and  enjoy 
more  comfort  than  the  people  of  any  other  section  of 

105 


106  SOME   TRANSPORTATION    PROBLEMS. 

the  earth.    This  is  one  of  the  dominant  causes  of  our 
success  commercially. 

The  average  rate  of  freight  charged  in  the  United 
States  in  1870 — about  fifty  years  ago — was  nearly 
three  times  as  much  as  is  charged  today,  or  conversely, 
the  average  rate  per  ton  per  mile  now  in  existence  is 
only  a  trifle  over  one-third  of  what  was  paid  in  1870. 
American  railroad  rates  generally  are  more  than  one- 
third  lower  than  those  in  Great  Britain.  Wise  rail- 
way men  hold  that  railroad  rates  should  be  unfluctuat- 
ing, and  without  preference  as  between  individuals  and 
communities. 

Pooling  and  Anti-Pooling. 

From  the  beginning  of  railroads  until  about  1870 
there  were  very  few  laws,  either  State  or  National,  for 
their  regulation.  About  1872  an  agitation  began  which 
has  generally  been  referred  to  as  "The  Granger  Move- 
ment," and  all  kinds  of  railroad  legislation  was  advo- 
cated. There  seems  to  have  been  a  delirium  for  regula- 
tion of  passenger  and  freight  rates  by  statute  epidemic 
at  that  time.  The  first  National  law,  however,  that 
was  considered,  was  known  as  the  Reagan  bill,  and 
from  this  sprang  the  present  law  known  as  the  Inter- 
state Commerce  Act,  which  was  designed  to  prevent 
unjust  discriminations  in  rates;  but  in  the  discussion 
of  that  measure  the  feeling  against  trusts  and  combina- 
tions of  all  kinds  was  introduced,  and  pooling  was 
prohibited,  which  has  resulted  in  a  continuation  of 
preferential  rates — ^mostly  of  a  secret  nature — all  of 
which  are  a  menace  to  justice  and  fair  play,  and  ought 
to  be  obhterated.    At  the  time  of  the  discussion  of  the 


SOME   TRANSPORTATION    PROBLEMS.  107 

merits  of  the  Reagan  bill,  Judge  Reagan,  the  originator 
and  introducer  of  the  bill,  was  against  pooling,  but  after 
having  been  chairman  of  the  Texas  Railroad  Commis- 
sioners for  over  ten  years,  he  has  changed  his  mind  and 
now  favors  such  legaHzed  pooHng. 

Effects  of  Keen  Competition. 

The  competition  between  large  carriers  is  so  intensely 
energetic  that  it  seems  impossible  to  secure  a  mainte- 
nance of  rates  without  an  apportionment  of  the  busi- 
ness. The  longer  the  line  and  the  poorer  its  service 
between  any  two  competitive  points,  the  more  induce- 
ments it  is  tempted  or  obhged  to  offer  to  get  a  share 
of  the  traffic;  and  the  more  business  it  is  allowed  by 
the  stronger  or  shorter  lines  to  take,  the  greater  the 
share  it  is  educated  in  beheving  itself  entitled  to;  so 
that  it  becomes  an  absolute  necessity  for  the  strong 
lines  to  recognize  the  competition  of  the  weaker  ones. 

Ijarge  shippers  thoroughly  appreciate  this  and  are 
quick  to  take  advantage  of  it.  It  is  quite  remarkable, 
under  existing  conditions,  that  rates  have  been  as  well 
maintained  as  they  have  been.  The  old  saying  that 
"competition  is  the  hfe  of  trade"  does  not  seem  to  hold 
good  in  the  present  age.  Carried  to  its  logical  conclu- 
sion, unrestricted  competition  is  the  death  of  trade — 
so  far  as  railroads  are  concerned. 

Benefits  of  Combination  System. 

There  have  already  been  tremendous  strides  made  in 

combining  railways.     The  Atchison,  Topeka  &  Santa 

Fe  Railway  system  is  composed  of  over  one  hundred 

smaller  corporations.     Rates  are  now  lower,  service  is 


108  SOME   TRANSPORTATION    PROBLEMS. 

better,  and  wages  are  higher  than  before  the  consolida- 
tions took  place.  The  people  expect  more  from  large 
corporations  than  from  small  ones,  and  they  are  usually 
managed  more  intelligently  and  are  more  apt  to  re- 
spond to  public  opinion.  The  very  fact  that  they  repre- 
sent so  much  capital  makes  them  anxious  to  maintain 
the  good  will  of  the  community. 

Three  Possible  Relief  Plans. 

The  best-disciplined  and  experienced  commercial 
minds  of  the  world  are  now  engaged  in  trying  to  work 
out  in  all  industrial  pursuits  a  plan  whereby,  through 
combination,  unrestricted  competition  will  cease,  labor 
and  capital  be  protected,  and  the  world  generally  be 
more  intelligently  and  better  provided  for.  One  of 
three  things  in  the  railroad  business  is  likely  to  happen : 

1.  The  legalization  of  pooling,  whereby  the  rail- 
roads may  make  enforceable  contracts  between  them- 
selves for  a  division  of  the  business  based  on  reasonable 
rates. 

2.  The  unification  of  ownership,  which,  in  the  ab- 
sence of  the  first  proposition,  is  making  rapid  strides. 

3.  The  taking  over  of  the  railroads  by  the  govern- 
ment, to  own  and  operate  them,  as  is  done  in  Germany 
and  some  other  European  countries. 

Danger  of  Unbridled  Discrimination. 

There  are  many  men  like  Paul  Morton,  formerly 
second  vice  president  of  the  Santa  Fe  system,  who 
advocate  legahzed  pooling,  because  they  believe  it  will 
go  a  long  way  toward  insuring  a  maintenance  of 
tariffs,  and  thereby  prevent  favoritism  and  inside  rates 


SOME   TRANSPORTATION    PROBLEMS.  109 

to  large  shippers  and  great  cities.  These  men  assert 
that  the  very  foundation  of  the  State  itself  is  threatened 
by  any  long-continued  discrimination  against  the  small 
shipper  and  the  small  town.  We  want  prosperous  vil- 
lages and  towns  all  over  the  United  States,  and  in  time 
we  will  insist  that  the  freight  rates  of  the  country  shall 
be  as  unfluctuating  between  individuals  and  communi- 
ties as  the  price  of  postage  stamps. 

To  Preserve  Reasonable  Rates. 

These  men  can  see  no  good  reason  why  Congress 
should  not  legalize  pooling,  so  long  as  rates  are  reason- 
able. Rates  can  become  unreasonable,  and  there  is  as 
much  to  fear  from  their  being  unreasonably  low  as 
from  being  unreasonably  high.  They  can  be  so  low  as 
to  be  unremunerative,  thereby  in  time  impairing  the 
property  and  destroying  the  service.  They  can  be  so 
high  as  to  check  the  movement  of  business.  The  selfisK 
interest  of  the  carrier  generally  prevents  this.  There 
should  be  proper  supervision  to  see  that  they  are  reason- 
able, which  means  neither  too  high  nor  too  low  for 
increasing  and  promoting  commerce. 

Unification  of  Railway  Interests. 

The  absence  of  an  arrangement  similar  to  pooling  is 
causing  the  unification  of  ownership  of  railroads.  This 
is  now  frequently  referred  to  as  "the  community  of 
interests."  Of  this,  Mr.  Morton  said:  "Personally, 
I  prefer  it  to  pooling,  and  do  not  view  the  ownership 
of  all  the  American  railroads  by  a  single  community 
of  interest  with  the  slightest  alarm.  The  benefits  the 
public  would  receive  from  such  a  condition  would  be 


110  SOME   TRANSPORTATION    PROBLEMS. 

much  greater  than  any  harm  that  could  come  from  it. 
Unrestricted  competition  benefits  a  few,  is  disastrous 
to  the  many,  and  costs  too  much.  There  is  a  vast 
amount  of  money  wasted  every  day  by  American  rail- 
roads which  ought  to  be  saved ;  and  if  it  could  be  saved, 
the  railroads  of  the  country  would  certainly  give  the 
shipping  and  traveling  public  a  fair  proportion  of  it, 
either  in  lower  rates  or  an  improved  service." 

Improved  Service,  Lower  Rates. 

Ever  since  railroads  have  been  in  operation  rates  have 
been  getting  lower  and  the  service  better.  Eighty  years 
ago  the  large  proportion  of  the  travel  was  by  stage, 
at  25  cents  per  mile;  no  baggage  was  allowed  except 
that  carried  by  hand;  passengers  rode  three  in  a  seat 
with  great  discomfort,  and  made  forty  miles  a  day  if 
roads  were  good.  Now  one  may  travel  with  the  greatest 
of  luxury,  in  Pullman  cars  and  dining-cars,  for  about 
2%  cents  per  mile,  and  make  forty  miles  in  an  hour. 
In  other  words,  the  transportation  of  the  country  has 
advanced  in  speed  from  forty  miles  per  day  to  forty 
miles  per  hour,  and  the  cost  is  only  one-tenth  of  what 
it  used  to  be.  And  the  comforts  coined  by  American 
inventors  and  transportation  men  are  easily  more  than 
sixteen  to  one  in  the  circulation  of  commodities  and 
persons  with  certainty,  celerity  and  safety  throughout 
this  vast  republic. 

Objections  to  Government  Ownership. 

If  all  the  railroads  should  be  owned  by  one  syndicate 
— it  is  probable  this  syndicate  would  be  composed  of 
the  people  generally — there  will  arrive  a  time  when  a 


SOME   TfiANSPORTATION    PEOBLEMS.  Ill 

vehement  demand  will  be  made  for  government  owner- 
ship and  operation  of  the  railroads  of  the  United  States. 
It  will  be  phenomenally  remarkable  if  such  demand 
does  not  come.  But  it  is  doubtful  if  such  popular  im- 
portunity will  result  in  the  transfer  of  the  railroads 
from  individuals  to  the  government,  because  it  is  mani- 
festly demonstrable  that  private  parties  can  more  effi- 
ciently and  cheaply  operate  the  roads  than  can  the 
government. 

There  are  many  things  against  the  ownership  and 
control  of  railroads  by  the  government.  The  building 
up  of  a  great  political  power  would  be  a  sufficient 
reason  for  opposing  such  an  ownership  and  manage- 
ment, but  the  simple  fact  that  the  government  seems 
unable  to  do  anything  efficiently  and  economically  in 
the  way  of  building  or  operating  properties  is  a  far 
better  reason  for  confining  the  government  to  legitimate 
functions  and  keeping  it  out  of  all  business,  except  its 
logical  one  of  protecting  the  life,  liberty,  and  property 
of  its  citizens. 

Problems  that  Cause  Worry. 

The  problems  that  a  railroad  traffic  officer  has  daily 
to  solve  are  so  diversified  and  interesting  that  they  are 
always  fascinating.  His  every-day  Ufe  is  made  up  of 
all  kinds  of  surprises.  He  has  two  groups  of  citizens 
always  in  view,  one  being  his  employers — ^the  stock- 
holders of  the  company  he  serves — and  the  other  being 
his  constituency,  or  the  public  which  the  railroad  serves 
and  to  which  he  is  obliged  to  cater. 

He  probably  finds,  from  a  perusal  of  his  morning 
mail,  that  there  has  been  a  smash  in  copper  or  a  labor 


112  SOME   TEANSPORTATION    PROBLEMS. 

strike  which  may  close  up  some  mining  district  or  shut 
down  some  industry;  or  that  a  bad  frost  has  destroyed 
the  fruit  crop;  or  that  hot  winds  have  burned  up  the 
corn ;  or  that  a  war  declared  between  two  foreign  coun- 
tries has  caused  a  great  demand  for  transport  service, 
thereby  taking  out  of  regular  channels  such  a  large 
number  of  ships  that  ocean  freights  are  all  out  of  joint. 
All  of  these  things  may  make  it  necessary  to  readjust 
rates  in  order  to  keep  things  moving.  The  traffic  offi- 
cial who  serves  his  constituency  best,  and  thus  promotes 
the  prosperity  of  the  people  whom  his  company  serves, 
serves  best  the  company  which  employs  him. 

Need  for  Government  Control. 

There  is  legitimate  need  for  the  Interstate  Commerce 
Commission,  or  some  similar  body  of  men  appointed 
by  the  Federal  government  with  power  to  supervise 
rates  where  there  are  pooling  contracts  in  existence, 
and  fair-minded  railroad  operators  beUeve  the  law 
should  be  more  comprehensive  than  it  is  now.  All 
transportation  by  rail  and  water  should  be  declared 
interstate  commerce  and  subject  to  the  supervision  of 
such  a  conmaission.  There  is  not  sufficient  State  traffic 
by  itself  anjrwhere  to  justify  excluding  it,  and  it  is 
irritating  to  see  certain  States  taking  action  to  protect 
the  people  within  their  own  borders  by  nullifying  orders 
that  have  been  issued  in  the  interest  of  the  country 
generally  by  the  national  Interstate  Commerce  Com- 
mission. If  we  are  to  have  a  strong  Federal  commis- 
sion, it  is  best  to  give  it,  if  possible,  full  power  over  all 
traffic,  both  State  and  inter- State,  and  thus  avoid 
confusion. 


SOME   TRANSPORTATION    PROBLEMS.  118 

Limit  on  Railway  Construction. 

In  England  there  is  a  good  custom  which  makes  it 
necessary  to  develop  reasons  for  a  railroad  before  it 
is  allowed  to  be  built.  Railroads  which  are  constructed 
for  the  sole  purpose  of  selling  out  to  lines  already 
existing  should  not  be  tolerated.  This  is  a  matter  that 
should  be  passed  upon  by  the  National  commission,  and 
no  railroad  should  be  chartered  unless  a  necessity  for 
it  is  clearly  shown.  Duplication  and  paralleling  of 
railroads  is  a  waste  of  money.  The  public  finally  has  to 
bear  the  burden  of  all  unnecessary  railroads.  A  rail- 
road may  be  likened  to  a  street  in  a  large  city;  it 
costs  money  to  build  a  street  and  to  keep  it  in  order, 
and  the  citizens  have  to  pay  for  it.  Therefore,  unneces- 
sary streets,  as  a  rule,  are  not  constructed,  and,  in  view 
of  the  control  and  regulation  already  partially  assumed 
by  the  State  and  National  governments,  a  similar  pro- 
tection to  railroad  investors  and  to  the  people  them- 
selves may  be,  and  ought  to  be,  demanded  and  accorded. 

Railroading  a  Fascinating  Profession. 

The  railroad  business  is  a  very  fascinating  occupa- 
tion, and  affords  to  young  men  as  good  a  field  of  labor 
as  any  other  avocation.  It  is  not  regarded  as  a  pro- 
fession, although  without  doubt  it  is  just  as  much  of 
a  profession  as  either  law  or  medicine,  and  within  its 
boundaries  are  just  as  many  opportunities  for  spe- 
cialists as  in  either  of  the  professions  mentioned. 

There  is  now,  and  always  will  be,  a  great  demand 
for  capable  men,  of  good  judgment;  and  every  branch 
of  the  railroad  business  affords  great  opportunity  to 

I.B.I,.  Vol.  8— « 


114  SOME  TBANSPORTATION    PROBLEMS. 

young  men.  The  best  way  for  the  young  man  who 
wants  to  acquire  a  knowledge  of  railroading,  is  to  start 
on  as  small  a  road  as  possible,  where  he  can  get  a 
knowledge  of  all  departments.  After  acquiring  more 
or  less  knowledge  of  the  workings  of  the  several  depart- 
ments, it  will  be  easy  for  him  to  decide  which  particular 
department  he  prefers.  Of  course,  a  young  man  cannot 
always  decide  this  matter  for  himself,  and  under  such 
circumstances  he  should  endeavor  to  master  any  work 
that  is  given  him,  with  the  well-defined  idea  that  good 
men  are  scarce,  and  that  there  is  always  room  at  the 
top,  which  can  only  be  reached  by  intelligence,  industry, 
and  integrity. 


CHAPTER  X. 

RAILWAYS  AS  INDUSTRIAL  FACTORS. 

The  year  1830  witnessed  the  first  operation  of  rail- 
ways, in  the  modern  sense  of  the  term,  on  a  compre- 
hensive scale  for  the  carrying  of  passengers  and  freight. 
In  this  year  the  Liverpool  &  Manchester  Railway, 
thirty-one  miles  long,  was  opened  in  the  Old  World, 
and  the  Baltimore  &  Ohio,  from  Baltimore  to  EUicott's 
Mills,  a  distance  of  thirteen  miles,  was  opened  in  the 
New.  About  ten  years  prior  to  this,  namely,  in  the 
year  1819,  the  first  steam  vessel  crossed  the  Atlantic; 
while  in  1844  Professor  Morse  opened  his  telegraph 
line  between  Baltimore  and  Washington — ^the  first 
practical  telegraph  system  in  the  world.  The  steam- 
ship, the  railway,  and  the  telegraph  are  the  gifts  of  the 
nineteenth  century.  They  constitute  elements  new  in 
the  history  of  intercommunication. 

Start  of  American  Manufactures. 

It  may  also  be  well  to  remember  one  other  date,  and 
that  is  the  year  1840.  About  this  time  manufacturing 
in  the  wider  sense  of  the  term,  began  to  take  place  in 
the  United  States.  It  is  easy  to  trace  the  beginning 
of  manufacturing  in  this  country.  It  started,  of  course, 
in  a  very  small  way  with  the  making  of  some  of  the 
immediate  necessities,  such  as  woolen  goods.  The  iron- 
worker commenced  to  make  a  few  plows.  Some  one 
of  our  forefathers,  who  had  learned  the  tanning  busi- 

115 


116  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

ness  in  Europe,  started  to  tan  a  few  hides.  The  wheel- 
wright went  in  partnership  with  the  man  who  could 
make  wagon  bodies,  and  so  a  few  woolen  mills,  plow 
factories,  tanneries,  and  wagon  factories  had  already 
made  their  appearance  before  1830;  but  the  bulk  of 
the  manufactured  goods  used  in  this  country  was  sent 
over  from  Europe. 

Railway  Factor  in  Development. 

By  the  year  1835  over  a  thousand  miles  of  railway 
were  in  operation  in  the  country,  and  at  the  close  of 
1915,  250,000  miles,  in  round  numbers,  were  being  oper- 
ated in  the  United  States.  From  1830  to  1915  is  85 
years,  so  that  this  development  of  railways  is  practically 
within  the  span  of  life. 

That  the  railways  have  been  factors  in  industrial  de- 
velopment is  a  self-evident  proposition.  It  goes  without 
saying  that  there  must  be  development  where  there  are 
transportation  facilities.  Railways  can  remain  passive 
and  freight  will,  nevertheless,  come  to  them,  and  more 
or  less  development  will  take  place;  but  railways  can 
also  take  an  active  part  in  development,  and  it  is  the 
policy  of  most  of  them  to  do  so. 

Education  of  a  Foreigner. 

Some  years  ago  a  foreign  government  railroad  official 
visited  this  country  for  the  purpose  of  investigating 
traffic  matters  on  American  railways.  He  said  that 
the  time  had  arrived  when  the  railroads  of  his  country, 
as  the  American  railways  had  already  done,  would  have 
to  take  cognizance  of  commercial  conditions.  His  par- 
ticular mission  was  to  perfect  plans  to  meet  the  com- 


RAILWAYS   AS    INDUSTRIAL   FACTORS.  117 

petition  of  a  new  route  in  an  adjoining  country.  He 
was  given  information  about  tariffs,  the  system  of  inter- 
changing freight-cars,  and  all  that  he  inquired  into.  He 
became  very  much  interested  in  the  interest  taken  by 
American  railways  in  development,  and  requested  an 
outline  in  writing  of  what  had  been  told  him.  In  his 
country  he  said  that  if  a  man  wanted,  at  his  own  ex- 
pense, a  side-track  to  a  mine  or  to  a  manufacturing 
plant,  months  were  taken  up  with  red  tape  before 
giving  a  "y^^"  or  "no"  answer.  About  two  years  after 
his  visit  a  statement  was  published  in  the  official  journal 
of  his  country,  which  practically  amounted  to  an  adver- 
tisement. It  stated  that  if  any  capitalist  contemplated 
starting  a  sawmill  the  chief  government  forester,  on 
application,  would  detail  a  deputy,  connected  with  the 
particular  district,  to  show  what  timber  tracts  in  the 
Crown  forests  were  available. 

How  Railways  Became  Interested. 

At  first  the  mileage  of  railways  in  this  country  was 
very  small,  and  they  were  merely  competitors  with 
teamsters.  The  first  railways  in  the  country  were  ven- 
tures connecting  one  town  in  the  East  with  another. 
It  meant  something  to  build  railways  in  those  days. 
The  public  had  little  or  no  confidence  in  them,  but 
gradually  the  idea  became  popular  and  railways  began 
to  extend  in  several  directions.  The  men  who  directed 
the  affairs  of  the  roads  unquestionably  foresaw  develop- 
ment, but  the  first  thing  in  hand  was  to  understand 
the  working  of  the  new  business  and  the  securing  of 
immediate  traffic.  Soon  came  the  project  of  running 
the  rails  to  a  coal  field  in  order  to  bring  fuel  to  the  large 


118  RAILWAYS   AS    INDUSTRIAL   FACTORS. 

towns.  Today  this  looks  like  a  promising  enterprise, 
but  in  judging  of  a  past  event  one  must  see  things  as 
they  appeared  at  the  time  in  question.  There  was  then 
an  abundance  of  timber  near  all  the  larger  towns,  and 
cordwood  was  cheap. 

Pushing  the  Rails  Westward. 

Nevertheless,  the  rails  were  laid  to  the  coal  mines, 
and  still  further  extensions  were  made,  so  that  by  about 
1850  the  several  lines  of  railway  in  operation  between 
New  York  and  Chicago  formed  an  all-rail  route. 
About  1856  lines  were  completed  west  to  the  Mississippi 
River.  In  1867  the  Missouri  River  at  Omaha  was 
reached,  and  in  1869  the  railway  was  completed  across 
the  continent.  But,  though  the  railway  spanned  the 
continent,  it  must  be  remembered  that  between  the 
AUeghenies  and  San  Francisco  there  was,  and  is  still, 
plenty  of  open  space. 

Work  of  Immigration  Bureaus. 

Building  railways  in  Europe  from  one  thickly  set- 
tled district  to  another,  with  abundant  capital  awaiting 
investment,  is  one  thing;  building  Unes  in  a  new  coun- 
try, extending  them  fifty  miles  beyond  the  last  farm, 
and  calling  the  terminus  "end  of  track,"  is  another. 
One  of  the  first  things  that  the  railways,  and  more  espe- 
cially those  west  of  Chicago,  had  to  do,  was  to  secure 
settlers  on  the  lines.  Hundreds  of  thousands  of  people 
now  hving  in  the  great  West  are  there  because  they 
or  their  fathers  read  the  enticing  pamphlets  and  leaflets 
published  by  the  railway  companies  telling  all  about 
the  new  opportunities  for  farming.     Great  exertions 


EAILWAYS   AS    INDUSTRIAL   FACTORS.  119 

were  made  throughout  the  Eastern  States  to  secure 
settlers  for  the  West.  Some  railways  even  made  efforts 
to  secure  farmers  from  the  British  Isles,  Germany,  and 
Scandinavia.  The  railways  have  now  largely  aban- 
doned making  efforts  to  secure  settlers  from  Europe ;  in 
fact,  the  governments  of  Germany  and  Austria  place 
obstacles  in  the  way  of  disseminating  emigration  litera- 
ture.    Effects  of  the  Great  War  remain  to  be  seen. 

Peopling  the  Western  Country. 

But  the  Western  country  is  still  sparsely  populated, 
and  the  work  of  securing  settlers  from  the  more  popu- 
lous Eastern  States  has  to  go  on.  On  some  railways 
a  regular  immigration  bureau  is  estabUshed,  with  an 
official  in  charge,  usually  called  the  "General  Immi- 
gration Agent,"  who  co-operates  with  land  companies, 
land  agents,  and  commimities  requiring  more  settlers. 
The  growth  of  Chicago,  the  settlement  and  prosperity 
of  the  Western  States,  and  the  reflex  of  this  western 
development  on  the  prosperity  of  the  East  all  attest  the 
efficient  labor  performed  by  the  railways  in  helping  to 
get  the  country  settled. 

A  Work  of  Self-interest. 

The  railways  do  all  this  from  motives  of  self-interest, 
but  where  a  great  enterprise  is  well  directed  the  com- 
monwealth is  benefited.  Millions  of  acres  still  await 
settlement,  and  this  work  must  go  on.  The  fact  that 
it  was  ever  undertaken  on  so  extensive  a  scale  by  the 
railways  will  in  course  of  time  be  forgotten,  but  the 
result  is  permanent.  All  this  is  intended  to  emphasize 
the  fact  that,  in  order  to  secure  a  general  development 


120  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

of  industries,  density  of  population  is  requisite.  It 
does  not  mean  that  excessive  density  is  required,  but 
there  must  be  a  fair  population.  In  this  connection  it 
may  be  noted  in  passing  that  history  shows  that  anti- 
railroad  legislation  is  generally  identified  with  States 
that  are  sparsely  populated. 

Why  Factories  are  Eneouraged. 

Agriculture  is,  of  course,  the  basis  of  the  country's 
wealth.  The  territory  west  of  Chicago  is  now  recog- 
nized as  one  of  the  principal  granaries  of  the  world. 
This  has  been  made  possible  only  by  the  extension  of 
railways.  A  bushel  of  wheat  is  now  carried  by  rail 
a  distance  of  nearly  2,000  miles  for  27  cents.  To  haul 
this  distance  by  wagon  would  cost  $5.25  per  bushel.  In 
the  early  days  of  railroads,  especially  those  west  from 
Chicago,  wheat  and  corn  were  the  principal  staples 
carried.  If  the  harvest  was  good,  things  went  well; 
but  if  the  farmers  had  a  poor  wheat  or  a  poor  corn 
crop,  it  affected  the  railways  severely.  It  affects  them 
yet,  but  if  there  is  diversified  farming,  the  farmer  more 
easily  recovers  from  the  effects  of  a  bad  year,  and  if 
the  railway  has  diversified  farming,  mines,  quarries, 
and  factories  on  its  lines,  it  also  gets  over  a  bad  year 
more  easily.  The  railway  managers,  therefore,  saw  that 
they  must  not  be  entirely  dependent  on  one  crop,  and 
took  steps  to  bring  about  a  change  in  conditions. 

Systematic  Work  of  Development. 

We  have  to  understand  that  the  railroads  always 
did  welcome  factories  that  came  to  them.  But  in  this 
new  policy  they  did  not  wait  to  welcome  them,  but 


RAILWAYS   AS   INDUSTRIAL   FACTORS.  121 

went  after  the  business.  The  railroads  said:  "We 
must  run  our  business  just  as  every  other  manufacturer 
does — send  our  travelers  to  sell  goods;  advertise;  tell 
what  there  is  on  the  land;  bring  the  water-powers  into 
use;  bring  the  coal  into  use;  get  brickyards  to  come." 
Then  they  thought:  "What  is  the  best  thing  to  do?" 
The  freight  department  might  take  it  in  hand,  or  the 
passenger  department;  but  at  last  some  one  hit  upon 
the  idea  that  it  would  be  better  to  put  one  man  at  the 
work,  to  organize  it  so  as  to  bring  about  results.  In 
other  words,  they  were  in  the  same  condition  as  the 
manufacturer  or  business  man  is  today.  It  is  one  thing 
to  make  goods  and  another  to  manufacture  a  market 
for  them.    This  is  the  theory  of  modern  business. 

Organization  Secret  of  Success. 

The  first  thing  in  the  railroad  problem  of  develop- 
ment was  organization.  Take  any  railroad  starting 
west  from  Chicago  as  it  was  some  ten  or  fifteen  years 
ago.  The  first  thing  was  to  take  the  territory  in  hand. 
The  instructions  of  one  man  were  to  "jimip  on  a  train 
and  look  out  of  the  window  for  about  six  months,  and 
study  our  whole  territory."  He  asked,  "When  do 
you  expect  results?"  The  railroad  officials  replied:  "In 
about  three  years."  "All  right,"  he  said;  "y^^  have 
the  right  idea." 

Of  course  he  did  not  merely  look  out  of  the  window, 
but  commenced  to  pay  attention  to  business.  The  first 
thing  was  to  get  around  to  all  the  towns  and  get  them 
to  organize  business-men's  associations.  There  used 
to  be  in  most  towns  a  business-men's  association.  They 
generally  had  a  billiard-room,  and  played  a  little  whist. 


122  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

and  such  things,  but  this  developer  said:  "Gentlemen, 
we  have  got  to  get  right  down  to  business,  and  live  up 
to  your  name.  You  must  form  a  committee  among 
yourselves.  One  man  must  find  out  all  about  the 
mineral  resources  around  your  town,  and  one  man  must 
find  about  the  timber,  and  you  must  post  yourselves 
as  to  what  you  have.  We  want  to  get  all  this  informa- 
tion collected." 

Education  of  the  Business  Men. 

At  that  time  most  of  the  people  around  their  own 
towns  in  the  country  did  not  know  what  their  resources 
were  in  the  first  place.  But  at  last  organization  secured 
the  desired  information.  There  are  5,000  or  6,000 
towns  on  the  great  railways,  like  the  Northwestern,  the 
St.  Paul,  the  Burlington.  You  can  go  today  to  any 
of  these  towns  and  say  to  some  of  the  business  men, 
"I  want  to  start  a  canned-lobster  factory,"  and  the 
smart  ones  will  say:  "No;  you  cannot  afford  to  bring 
the  lobsters  to  the  West  to  can  them."  But  the  next 
man  says :  "Mine  is  an  excelsior  factory."  "All  right," 
will  be  the  reply ;  "you  are  the  man  we  want.  We  have 
Cottonwood  around  here  in  plenty,  and  this  is  the  place 
to  locate  your  excelsior  factory."  In  most  towns, 
thanks  to  the  organization  work  done  by  the  railroads, 
there  is  some  one  who  can  tell  the  resources,  whether 
you  can  compete,  and  whether  you  can  get  a  free  site, 
and  what  you  can  do. 

Publicity  a  Powerful  Factor. 

After  thoroughly  organizing  the  West,  there  was 
a  lot  of  advertising  in  the  East.    Everything  said  was 


RAILWAYS   AS    INDUSTEIAL   FACTORS.  128 

taken  with  90  per  cent  discount.  The  great  center  of 
manufacturing  was  around  the  Alleghenies.  The 
manufacturers  there  had  no  idea  that  manufacturing 
could  be  done  in  the  West.  But  the  railway  developers 
replied:  "We  can  make  steel  rails  in  Chicago."  That 
is  a  good  argument,  because  it  implies  that  coal  and 
labor  and  iron  and  hmestone  and  everything  needed 
is  there. 

The  first  thing  done  was,  for  years,  to  advertise  in 
the  East  just  one  plain  statement — ^that  the  people 
were  moving  Westward;  that  the  lands  in  the  West 
were  being  settled;  that  great  markets  were  being 
formed  there,  with  great  purchasing  power;  that  the 
people  were  people  of  enterprise  and  would  buy  goods ; 
that  the  Eastern  man  should  go  West. 

Advertising  on  Impressive  Scale. 

One  railroad  kept  that  notice  in  its  time-table,  and 
issued  forty  thousand  copies  a  month,  for  eight  years; 
and  somebody  must  have  read  it.  Of  one  circular  alone 
four  milHons  were  circulated  in  the  East.  You  can 
see  the  effect.  The  people  at  Pittsburg  had  to  sell 
their  implements  at  a  Chicago  rate.  So  at  last  they 
began  to  say:  "What  is  the  use  of  being  so  far  away 
from  the  market?  The  market  is  West;  that  is  where 
they  are  growing  wheat."  So  some  of  the  agricultural 
implement  men  commenced  to  move.  They  were  about 
the  first  to  go  West. 

Result  of  Unsuccessful  Experiments. 

A  man  was  experimenting  in  New  York  with  flax. 
He  had  made  a  great  deal  of  money  in  the  South,  and 


124  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

had  a  fine  laboratory  in  New  York.  "Why  don't  you 
come  out  West  and  see  our  flax?"  he  was  asked.  He 
wired  that  he  would  come  on  the  next  train.  He  did 
so,  and  started  a  plant  up  in  Minnesota  to  make  paper. 
But  after  trying  it  for  a  year,  in  1892,  he  could  not 
make  it  go.  He  had  spent  $60,000,  without  success, 
and  the  World's  Fair  was  coming  on,  so  he  turned  the 
whole  plant  into  a  furniture-tow  factory,  and  in  1893 
they  made  $20,000  or  $30,000  out  of  furniture-tow, 
and  they  are  making  tow  profitably  yet. 

A  few  years  later  the  same  man  said  he  thought  he 
could  make  mats  from  slough-grass.  A  railroad  offi- 
cial took  him  all  over  the  West  to  try  to  find  the  grass, 
and  finally  it  was  located  at  a  place  near  St.  Paul  and 
also  near  Oshkosh.  At  Oshkosh  he  has  employed  400 
people  for  the  last  four  years,  and  the  same  number  at 
St.  Paul,  and  is  opening  another  plant  now  in  the 
North. 

Building  Up  a  Big  Industry. 

Some  years  ago,  there  were  a  few  sewer-pipe  fac- 
tories at  Akron,  and  nothing  farther  West,  and  carry- 
ing the  pipe  to  Chicago  was  about  all  the  freight  it 
could  stand.  There  must  be  a  limit  to  carrying  cheap 
material.  The  people  west  of  the  Mississippi  could 
hardly  get  sewer-pipe  at  all,  except  at  high  prices,  be- 
cause even  the  railroads  could  not  make  rates  low 
enough  on  it.  About  this  time,  a  man  in  Chicago  went 
into  a  railway  office  and  said:  "I  want  to  make  a  sort 
of  conduit-pipe.  We  must  put  the  telephones  under- 
ground, and  I  want  to  find  out  from  you  where  we 
can  get  a  deposit  of  suitable  clay." 


RAILWAYS   AS    INDUSTRIAL   FACTORS.  125 

"We  do  not  think  you  can  get  it  near  Chicago,  be- 
cause vitrified  clay  does  not  exist  here,"  said  the  rail- 
road officials;  "but  we  will  try."  So  they  wrote  to 
127  agents  within  a  hundred  miles  from  Chicago,  ask- 
ing, "Have  you  got  anything  in  your  locality  in  the 
shape  of  vitrified  clay,  or  any  good  clay  that  will  make 
brick?  If  you  are  too  busy,  please  hand  this  to  someone 
interested." 

Eighty  of  these  agents  answered  within  a  week — ^they 
had  or  had  not.  Some  six  answered  in  fourteen  days, 
and  about  ten  laggards  answered  in  about  three  months. 
That  happens  when  a  man  is  dealing  with  large  bodies 
of  men.  Three  of  the  agents  answered  by  telegraph, 
"We  have  blue  clay."  The  manufacturer  was  invited 
to  look  at  the  clay. 

Result  of  Systematic  Effort. 

The  railway  official  thought,  "We  might  as  well 
spread  this  thing,"  and  he  picked  up  the  Chicago 
directory  and  saw  that  there  were  eighty-nine  brick 
manufacturers  in  the  town.  He  wrote  them  all  a  nice 
circular  letter,  saying:  "Blue  clay  has  been  discovered 
on  the  St.  Paul  road.  We  intend  to  run  a  special  train 
next  Wednesday  at  10  o'clock;  can  you  send  a  repre- 
sentative, or  come  yourself?  If  so,  we  will  send  a 
ticket."  He  received  sixty-one  answers;  thirty-one 
acceptances,  the  others  giving  reasons  why  they  could 
not  go.  Some  argued  that  there  was  no  use  in  putting 
brickyards  out  of  Chicago.  The  railroad  man  notified 
the  station  agents  to  have  the  farmers  dig  holes  to  show 
the  clay.  He  knew  these  farmers,  and  he  wrote  them: 
"The  train  will  arrive  at  10:15  and  will. leave  vour  sta- 


126  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

tion  at  10:20,  and  if  the  hole  is  not  dug  we  will  pass 
on  to  the  next  station." 

The  result  of  the  trip  was  that  one  man  was  induced 
to  put  a  yard  there,  and  it  is  running  yet.  About  a 
month  afterward,  W.  J.  Alsip,  a  well-known  brick  man 
of  Chicago  who  died  recently,  said:  "One  of  my  com- 
petitors has  gone  up  on  your  road.  I  think  I  will  put 
up  a  plant  there."  He  sent  a  man  up  there,  and  he 
found  a  place  just  above  this  other  yard,  and  they  put 
up  a  yard  that  has  always  turned  out  from  ten  to  twelve 
cars  of  brick  a  day.  These  men  ship  the  brick  to  all 
the  httle  towns  around — Janesville,  Rockford,  etc., — 
and  this  led  again  to  other  developments. 

Development  of  Tannery  Industry. 

The  next  thing  to  do  was  to  get  timber  known.  Of 
course  everybody  knows  that  pine  will  sell,  but  there 
were  a  number  of  other  kinds,  like  hemlock,  which, 
fifteen  or  twenty  years  ago,  had  no  particular  market 
in  the  West.  The  tanneries  at  that  time  were  mostly 
in  the  East,  though  there  had  always  been  a  few  around 
Milwaukee.  The  railways  could  not  get  northern  Wis- 
consin settled,  as  the  immigration  agents  said:  "We 
cannot  get  any  settlers,  because  we  have  no  market 
for  the  timber  they  are  clearing  off."  There  was 
enough  hemlock  there  to  run  all  the  tanneries  in  the 
United  States  for  fifty  years.  This  fact  was  adver- 
tised by  the  railways.  In  Pennsylvania  the  supply  of 
bark  was  giving  out,  and  would  not  last  more  than 
five  or  six  years.  That  was  twenty  years  ago,  and  they 
have  lots  of  bark  yet.  But  on  this  idea  the  investigation 
was  made  and  all  the  data  about  how  much  hemlock 


RAILWAYS   AS   INDUSTRIAL   FACTORS.  ISff 

there  was  in  Wisconsin  collected.  "How  can  we  make 
this  known  through  the  East?"  was  the  next  question. 
It  was  solved  by  sending  a  news  story  to  the  Milwaukee 
Sentinel. 

Assisted  by  Newspaper  Men. 

The  man  at  the  other  end  was  a  smart  fellow.  He 
was  working  for  the  newspaper,  the  writer  was  work- 
ing for  the  railroad,  but  he  saw  that  if  they  could  get 
these  tanners  from  Pennsylvania  into  Wisconsin  they 
would  sell  more  newspapers  and  get  more  advertising. 
So  he  took  the  article  and  put  on  big  scare-head  hues: 
"Wisconsin  the  Coming  Place  for  Tanneries!  Penn- 
sylvania Tan-Bark  Giving  Outl" 

Other  correspondents  and  editors  took  it  up  and  in 
a  short  time  it  was  spread  all  over  the  country.  The 
result  was  that  a  great  tannery  industry  was  built  up 
in  Wisconsin,  to  the  profit  of  both  people  and  railways. 
One  man  came  from  Boston  and  thought  he  would  look 
at  the  bark.  He  had  two  cars  of  it  shipped  East, 
sampled  it,  said  it  was  all  right,  went  back,  and  estab- 
lished a  big  tannery  at  Merrill.  Today  the  United 
States  Leather  Co.  has  its  tannery  at  Warsaw;  the 
American  Hide  &  Leather  Co.,  at  Merrill,  and  the 
Eastern  &  Western  Tanning  Co.,  at  Tomahawk.  The 
Wisconsin  Central  later  put  a  commissioner  at  work, 
and  he  has  more  than  duplicated  the  work  done  by  the 
St.  Paul  road. 

Origin  of  Wisconsin  Paper  MiUs. 

In  1891  the  first  paper  mill  was  established  on  the 
Wisconsin  river.     Today  there  are  many  paper  mills 


128  RAILWAYS   AS   INDUSTRIAL   FACTORS. 

'  there.  Another  man  tried  an  experiment,  and  thought 
he  would  make  paper  with  hemlock.  He  argued :  "It's 
the  very  thing  for  me;  the  tanneries  will  take  the  bark 
and  I  will  take  the  logs."  And  that  has  been  done  since 
then.  He  went  up  and  took  the  logs  that  the  farmers 
had  peeled.  Everybody  knows  now  that  the  paper 
industry  of  Wisconsin  is  a  big  thing.  The  railways 
"did  it." 

Hotels  came  next.  It  was  essential  in  the  carrying 
out  of  railway  development  plans  that  prospective  in- 
vestors should  have  decent  hotel  accommodations,  so 
one  of  the  first  things  the  railways  had  to  do  was  to 
encourage  good  hotels  through  the  West.  At  Mari- 
nette, before  this  was  done,  you  could  not  keep  a  man 
twenty-four  hours;  no  Eastern  man  would  stay.  The 
business  men  were  called  together,  and  they  said :  "We 
will  subscribe  $75,000  to  a  hotel.  If  we  make  6  per 
cent,  all  right ;  if  we  make  5  per  cent,  or  4  per  cent,  all 
right;  but  we  will  have  the  hotel" — and  they  built  it. 
The  same  was  done  in  other  cities.  Investors  found 
the  "frontier"  fairly  comfortable.  It  was  a  big  factor 
in  inducing  them  to  put  their  money  into  enterprises, 
which  are  yearly  growing  larger  and  adding  wealth  and 
population  to  the  West. 

Moved  by  Selfish  Motive. 

In  all  this  work  of  development,  of  course,  the  rail- 
ways were  governed  by  a  selfish  motive — they  wanted 
the  increased  traffic  which  development  would  bring, 
and  they  got  it.    In  the  securing  of  this  increased,  and 


RAILWAYS   AS   INDUSTRIAL   FACTORS.  129 

ever-increasing,  traffic,  the  railroads,  perhaps,  "builded 
better  than  they  knew."  What  if  they  did?  The  bene- 
fits thus  obtained  are  universal.  It  is  not  the  railroads 
alone  that  are  reaping  the  profit. 


I.B.I,.  Vol.  8—9 


"In  the  passing  of  a  generation,  as  It  were,  the  rail- 
road and  the  steamship  have  transformed  the  whole 
realm  of  industrial  and  social  life.  They  have  enriched 
every  occupation,  given  multiplied  value  to  each  pursuit, 
added  incalculably  to  the  means  of  human  enjoyment, 
made  our  vast  wealth  possible.  They  are  at  once  the 
greatest  achievement  and  greatest  necessity  of  our  mod- 
ern civilization.  But  we  do  well  to  remember  that  this 
marvelous  achievement  has  been  accomplished  by  pri- 
vate enterprise  and  private  capital,  and  that  we  must 
look — we  certainly  should  look — to  that  same  source  for 
its  further  and  adequate  development.  Far  distant  be 
the  day  when  any  thoughtful  man  will  seriously  contem- 
plate a  different  national  policy." — The  Hon.  Martin 
A,  Knapp,  Chairman  of  Interstate  Commerce  Com- 
mission. 


CHAPTER  XI. 
TRAINING  OF  RAILWAY  MECHANICS. 

The  problem  of  effectually  supplying  the  ever- 
increasing  demand  for  skilled  and  thoroughly  trained 
mechanics  has  been  constantly  in  the  foreground  and 
for  some  years  past  has  caused  a  great  deal  of  anxiety 
to  the  heads  of  all  large  industrial  corporations,  and 
everywhere  was  heard  sighs  of  regret  that  the  ranks 
of  the  good  mechanics  were  being  rapidly  depleted. 

Realizing  that  this  was  in  part  correct,  the  Grand 
Trunk  Railway  some  years  ago  endeavored  to  fill  the 
breach  and  pioneered  a  movement  which  has  since  been 
copied  on  a  minor  scale  by  all  the  great  railroads  of 
Canada  and  the  United  States,  as  well  as  the  largest 
manufacturing  firms  in  both  these  countries,  namely, 
the  technical  training  of  their  apprentices. 

Benefits  of  the  System. 

The  average  boy,  who  from  force  of  circumstances 
had  to  leave  school  in  the  early  stages  of  his  education 
and  take  up  his  life  work,  had  little  to  look  forward  to 
in  the  matter  of  education,  except  by  years  of  unre- 
mitting toil,  unassisted,  unrewarded,  and  finally  arriv- 
ing at  a  smattering  of  a  few  primary  subjects  imper- 
fectly learned. 

With  this  problem  before  it,  the  Grand  Trunk  Rail- 
way started  a  class  for  its  apprentice  boys,  who  were 
eager  to  learn;  commenced  to  teach  subjects  which  at 

131 


132  TKAINING   OF   RAILWAY   MECHANICS. 

once  aroused  interest  among  the  boys,  bearing  as  it 
did  on  the  every-day  needs  of  mechanics.  In  a  surpris- 
ingly short  time,  the  desire  for  knowledge  being  whetted, 
it  was  found  necessary  to  increase  the  scope  of  the  teach- 
ing, as  the  apprentice  boy  of  the  day  saw  within  his 
grasp  the  very  highest  position  of  responsibility  in  the 
management  and  operation  of  the  road.  He  realized 
that  here  was  an  opportunity  to  obtain  an  education 
little  short  of  a  college  course,  with  a  minimum  exertion 
on  his  part  and  at  the  same  time  be  independent  and 
self-supporting. 

Graduates  Get  Good  Positions. 

From  the  commencement  on  a  small  scale,  the  system 
has  grown  until  at  the  present  time  these  technical 
schools  are  spread  at  all  important  centers  throughout 
the  entire  Grand  Trunk  System  and  hundreds  of  schol- 
ars are  enrolled,  whilst  every  large  railway  system  of 
this  continent  boasts  several  of  the  G.  T.  training  schools 
as  their  chief  mechanical  engineers,  and  more  than  one 
of  our  largest  industrial  concerns  have  graduates  as  their 
chief  draughtsmen. 

Outline  of  Curriculum. 

The  subjects  taught  are  graded  to  suit  the  student's 
ability,  and  in  dozens  of  cases  boys  who  left  school  when 
in  the  second  book  can  now  do  problems  which  would 
tax  the  powers  of  a  high  school  graduate  to  the  utmost. 

The  subjects  taught  comprise  everything  from  simple 
arithmetic  to  higher  mathematics,  mechanics,  machine 
design  and  mechanical  drawing,  and  so  well  has  the 
course  been  graded  that  numerous  requests  from  me- 


TEAINING   OF   RAILWAY   MECHANICS.  133 

chanics'  institutes  and  even  our  largest  technical  colleges 
have  been  received  for  complete  sets  of  instruction  books. 
The  entire  cost  of  education  at  these  training  schools 
is  borne  by  the  Grand  Trunk  System,  which  furnishes 
all  the  equipments  and  engages  the  instructors,  who 
must  themselves  have  had  a  thorough  technical  and 
practical  training,  so  as  to  enable  them  to  anticipate 
the  needs  of  the  apprentices. 

How  Boys  are  Rewarded. 

Further  encouragement  is  given  the  boys  to  learn  by 
the  large  number  of  prizes  donated  annually,  open  to 
competition  to  all  classes  on  the  system,  and  include  free 
scholarships  in  engineering  at  McGill  University,  as 
well  as  handsome  cash  prizes. 

These  prize  competitions  are  held  at  different  cen- 
ters, to  which  the  best  students  at  the  several  centers  are 
invited,  free  transportation,  entertainment  and  all  ex- 
penses being  borne  by  the  company. 

The  appreciation  of  individual  promotions  forms  one 
of  the  strongest  features  in  the  system  and  serves  to 
keep  alive  the  keenest  interest  in  the  classes,  as  the  boys 
realize  that  as  soon  as  they  arrive  at  a  certain  standard 
of  excellence  increased  pay  is  their  reward,  and  many  of 
our  foremost  students  of  political  economy  see  in  this 
system,  as  it  is  being  carried  out,  the  future  supply  of 
skilled  mechanics,  master  mechanics,  superintendents, 
etc.,  being  carefully  husbanded,  and  an  effective  solution 
of  the  labor  problem,  namely,  the  prompt  recognition 
of  individual  merit. 

Compulsory  Classes  in  Drawing. 

For  two  evenings  per  week  during  the  fall  and  winter 
months  he  must  attend  mechanical  drawing  classes. 


134  TRAINING   OF   RAILWAY    MECHANICS. 

study  of  practical  mechanics  and  elementary  electricity, 
the  most  competent  instructors  procurable  being  pro- 
vided. On  the  staff  are  two  graduates  of  American  and 
Canadian  engineering  colleges,  Purdue  and  McGill. 
The  work  in  the  drawing  class  is  outlined  in  a  special 
text  book  written  by  the  company's  chief  draughtsman 
at  Montreal,  who  is  also  the  author  of  the  book  used  on 
practical  mechanics. 

During  the  term  frequent  examinations  are  held,  and 
the  points  gained  by  each  boy  are  posted  so  that  they 
may  all  keep  advised  as  to  just  what  progress  they  are 
making,  and  thereby  be  able  to  brush  up  the  weak  spots 
that  the  examinations  have  disclosed. 

Prizes  for  Best  Work. 

The  annual  competitive  examination  is  alwaj^s  con- 
ducted by  the  company's  chief  draughtsman  from  JNIon- 
treai,  and  occurs  at  all  the  large  shops  along  the  system. 
Prizes  are  awarded  to  the  apprentices  obtaining  the 
highest  average  in  their  respective  years.  These  prizes 
amount  to  $40  for  each  shop,  and  are  distributed  over 
the  different  years  of  apprenticeship. 

In  addition  to  the  prizes  as  stated  above,  there  is  a 
capital  prize  offered  of  $25  for  each  subject.  This  is 
competed  for  by  the  apprentices  obtaining  the  highest 
averages  in  drawing  and  practical  mechanics  at  their 
respective  stations.  These  apprentices  are  given  a  trip 
to  some  point  on  the  system  where  the  final  examina- 
tions are  held,  and  the  one  receiving  the  highest  number 
of  points  in  each  subject  receives  the  amount  stated. 
This,  in  addition  to  what  he  has  already  received  at  his 


TRAINING   OF    RAILWAY   MECHANICS.  135 

station,  will  make  a  total  of  $29,  $33  or  $58,.  if  he  has 
been  successful  in  all  subjects. 

After  the  season  has  closed,  the  boys  at  some  of  the 
large  shops  hold  what  is  termed  "Apprentice  Night." 
This  is  the  social  event  of  the  season.  Each  one  makes 
a  drawing,  which  is  neatly  gotten  up  and  inked  in.  This 
is  placed  on  exhibition,  and  the  prizes  are  awarded  for 
each  year  of  apprenticeship. 

Method  of  Apprenticeship. 

The  form  of  apprenticeship  which  has  been  adopted 
by  the  Grand  Trunk  Railway  System  has  been  in  suc- 
cessful operation  for  a  number  of  years  and  has  been 
the  means  of  supplying  that  company  with  skilled 
mechanics  in  the  most  satisfactory  manner.  All  appren- 
tices are  indentured  to  the  machinist's  trade  for  five 
years,  and  to  the  blacksmith's,  boilermaker's,  or  other 
trades  for  four  years.  Five  cents  per  day  is  deducted 
from  the  wages  of  each  apprentice,  and  the  total  amount 
is  returned  to  him  at  the  expiration  of  his  apprenticeship 
with  an  addition  of  $25  as  a  bonus  if  his  services  have 
been  entirely  satisfactory. 

The  first  requisite  in  employing  an  apprentice  is  to 
know  that  he  is  morally,  physicalh^  and  mentally  capable 
of  filling  the  requirements  of  a  mechanic.  To  ascertain 
this  the  apprentice  is  required  to  make  his  application 
direct  to  the  master  mechanic  or  the  general  foreman, 
and  to  be  not  under  15  or  over  18  years  of  age.  He  is 
required  to  undergo  a  medical  examination  so  as  to 
assure  the  head  of  the  department  that  he  is  healthy 
and  likely  to  be  able  to  follow  up  the  trade  after  he  has 
completed  the  term  of  apprenticeship. 


186  TRAINING   OF   RAILWAY    MECHANICS. 

Examination  of  Applicants. 

This  information  being  satisfactory,  he  has  to  pass 
an  examination  in  the  master  mechanic's  or  general  fore- 
man's office.  This  is  usually  conducted  by  the  chief 
clerk  or  some  person  specially  appointed  for  that  pur- 
pose, as  follows : — 

To  be  able  to  read  extracts  from  instructions  from 
end  of  employees'  train  time-table,  as,  per  example, 
standing  thirty  inches  from  same : — 

All  the  apprentices  of  this  Company  must  be  able  to  read  the  rules 
readily.  Regulations  are  published  from  time  to  time  and  workmen  are 
expected  to  acquaint  themselves  with  them. 

To  be  able  to  hear  the  ticking  of  an  ordinary  open-face 
watch  at  a  distance  of  four  feet. 

By  writing  a  letter,  from  dictation,  applying  for  em- 
ployment in  the  shops,  as,  per  sample : — 


Mr. 


Dear  Sir, — 

I  am  desirous  of  entering  the  service  of  the 

Railway  as  an  apprentice  in  the  shops  at 

I  am years  of  age  and  in  good  health  and  free  from  bodily 

defects.    When  I  left  school  at I  was  in 

grade  (or  form).    Since  then  I  have  been  employed  as  follows:    

Should  you  accept  this  application,  I  will  promise  faithfully 

to  conform  to  the  rules  and  regulations  of  the 

Railway,  and  try  to  become  a  first-class  mechanic. 

Yours  truly, 


To  be  able  to  work  out  correctly  similar  examples  to 
the  following: — 

Multiply  122,983,672  by  527,001. 
Divide  723,643,978  by  365. 


TRAINING   OF   RAILWAY   MECHANICS.  1S7 

Books  for  Further  Instruction. 

The  apprentice,  after  having  passed  a  successful 
examination,  is  provided  with  a  text-book  for  his  instruc- 
tion and  guidance.  This  book  contains  examinations  for 
the  apprentice  for  each  promotion  he  takes  while  serv- 
ing his  apprenticeship,  and  if  he  fails  in  any  of  these 
examinations  he  is  set  back  to  his  old  position  for  another 
term  and  the  next  apprentice  in  turn  is  promoted  ahead 
of  him,  provided  the  next  apprentice  passes  a  satisfac- 
tory examination.  When  another  promotion  is  neces- 
sary the  apprentice  who  failed  is  given  another  oppor- 
tunity to  qualify.  If  he  fails  the  second  time  he  is  either 
dismissed  from  the  service  or  given  some  minor  position 
he  is  capable  of  filling  outside  of  the  trade,  as  it  is  con- 
cluded that  he  is  either  not  sufficiently  intelligent  or  too 
indifferent  to  make  a  mechanic. 

After  passing  the  first  or  entrance  examination  in  the 
master  mechanic's  or  general  foreman's  office  the  ap- 
prentice is  sent  out  to  the  boiler,  blacksmith  or  copper- 
smith shops,  or  other  shop  as  may  be  required.  He 
stays  there  from  six  to  nine  months,  and  is  taught  to 
be  active  and  obedient  and  to  prepare  himself  for  future 
promotions. 

Questions  from  Text-Boofc. 

Following  are  a  few  samples  of  the  contents  of 
apprentices'  text-book : — 

Q.  What  is  the  weight  of  standard  shop  hammer 
(machinist's  hand)  ? 

A.     Two  pounds. 

Q.  At  what  point  should  hammer  be  held  for  efH- 
cient  service? 


138  TRAINING   OF   RAILWAY    MECHANICS. 

A.     At  the  extreme  end  of  handle. 

Q.     What  is  the  standard  length  of  hammer  handle? 

A.     15  inches  over  all. 

Q.  How  many  classes  of  drills  are  in  general  use 
in  this  shop? 

A.     Two,  viz. :    Flat  and  standard  twist  drills. 

Q.  At  what  degree  is  cutting  end  of  twist  drill 
ground? 

A.  59  degrees,  measuring  angle  from  center  line  of 
drill. 

Q.  Name  the  speeds  for  drilling  brass,  cast  iron, 
wrought  iron  and  steel,  different  size  holes,  with  carbon 
steel  drills,  and  air  hardened  steel  drills. 

A.  As  per  table  and  as  much  faster  as  drill  and 
material  will  permit. 

Q.  Give  the  correct  speeds  for  a  1-inch  carbon  steel 
drill  in  iron  or  steel  and  brass. 

A.  Iron  or  steel,  115  revolutions  equal  to  30  feet 
per  minute;  brass,  558  revolutions  equal  to  153  feet  per 
minute. 

Q.  Give  the  correct  speed  for  a  1-inch  high  speed 
steel  drill  in  iron  or  steel  and  brass. 

A.  Iron  or  steel,  191  revolutions  equal  to  49  feet 
per  minute;  brass,  781  revolutions  eaual  to  204  feet 
per  minute. 

Q.  What  lubricant  is  used  for  driUing  wrought  iron 
or  steel? 

A.  A  mixture  of  1  lb.  soft  soap,  14  lb.  soda,  1  pint 
oil  to  2%  gallons  water,  or  such  other  lubricant  as  may 
be  furnished. 

Q.     What  is  a  center  punch  used  for? 


TRAINING   OF   RAILWAY    MECHANICS.  139 

A.  Marking  center  of  holes  for  drilling  and  indi- 
cating lines  on  other  machine  work. 

Q.  What  is  a  round  nosed  chisel  used  for  at  drilling 
machine  ? 

A.     Drawing  centers. 

Q.  Which  side  of  a  belt  should  be  run  next  to  pulley 
or  cone? 

A.     Smooth  or  grain  side. 

Q.  What  are  the  general  rules  to  be  observed  re- 
garding cleanliness  and  care  of  machines? 

A.  All  cuttings  of  different  materials  are  to  be  kept 
separate.  Machine  to  be  thoroughly  cleaned  once  per 
week  in  addition  to  ordinary  daily  cleaning,  and  all 
working  parts  kept  properly  lubricated.  Marking  or 
defacing  machine  in  any  way  to  be  carefully  avoided. 

Q.  Explain  the  reading  of  an  ordinary  standard 
measuring  rule? 

A.     Apprentice  will  explain  practically  from  rule. 

Q.  How  many,  and  what  are  the  names  of  the  dif- 
ferent classes  of  calipers  in  general  use  on  drilling 
machine  ^ 

A.  Three,  inside,  outside,  compass  or  hermaphro- 
dite. 

Q.  What  tools  are  necessary  for  laying  off  and 
measuring  work  at  drilling  machine? 

A.  Inside,  outside  and  compass  caliper,  dividers, 
center  punch,  rule,  square  and  surface  gauge. 

Q.     What  is  a  jig? 

A.  A  device  for  standardizing  and  duplicating 
parts,  and  is  a  casting  or  plate  fitted  with  hardened 
steel  bushes  which  form  a  guide  for  drilling,  slotting, 
turning  or  planing. 


140  TEAINING   or   RAILWAY   MECHANICS. 

Purpose  of  the  Text-Book. 

The  object  of  the  text  book  is  to  have  the  boy 
theoretically  conversant  with  the  work  that  is  going  to 
be  done  by  him  after  his  next  promotion.  For  instance, 
a  boy  going  from  the  blacksmith  to  machine  shop  has 
to  pass  his  examinations  before  he  is  accepted  in  the 
machine  shop,  which  is  called  "Examination  for  pro- 
motion of  apprentices  from  other  shops  to  the  machine 
shop."  As  he  is  usually  put  on  a  drill  to  commence 
with,  by  studying  his  text  book  he  learns  considerable 
about  it,  and  also  the  tools  he  is  to  use  in  connection 
with  it.  The  same  practice  is  followed  throughout  the 
whole  term  of  apprenticeship,  and  while  the  apprentice 
is  working  at  one  machine  he  is  studying  as  much  as 
possible  about  the  machine  he  is  to  go  on  next.  One 
of  the  great  advantages  of  this  system  is  that  it  gets 
the  apprentice  thinking,  and  leads  him  to  reading  up 
in  line  with  his  work. 

Advantage  of  Indenture  System. 

The  indenture  system  has  been  found  of  great  ad- 
vantage both  to  the  company  and  the  apprentice.  It 
has  a  tendency  to  keep  the  apprentice  satisfied,  and 
steady  his  energies  along  the  required  lines.  It  also 
prevents  him  from  being  tampered  with  by  outside  firms 
or  corporations  who  desire  to  obtain  the  services  of  the 
boy  as  soon  as  he  has  become  useful  to  the  company 
which  has  instructed  him. 

At  the  completion  of  his  term  each  apprentice  re- 
ceives a  certificate  showing  that  he  has  served  as  an 
apprentice  and  as  a  mechanic  in  the  branch  of  trade  that 
he  was  apprenticed  to. 


TRAINING   OF   RAILWAY   MECHANICS.  141 

An  apprentice  is  required  to  serve  five  years  at  the 
following  rates:  8c,  10c,  12c,  15c  and  17c  per  hour. 
Before  he  is  granted  each  year's  advance  he  is  required 
to  pass  a  written  examination  on  shop  work,  also  make 
a  drawing  of  some  detail  part  of  a  locomotive,  as  speci- 
fied in  the  apprenticeship  book,  which  examination  and 
drawing  must  have  the  approval  of  the  master  mechanic 
and  the  superintendent  of  motive  power  before  his 
advance  is  allowed. 

AU-Round  Competency  Secured. 

This  system  insures  thorough  education  in  all  details 
of  the  trade,  and  while  some  of  the  work  may  be  spe- 
cialized it  is  not  done  by  the  apprentice  until  he  be- 
comes a  journeyman.  For  instance,  the  apprentice 
comes  from  the  boiler  shop  to  the  machine  shop,  from 
the  machine  shop  to  motion  bench,  to  the  side  rod  bench, 
to  the  axlebox  gang,  to  the  steam  pipe  gang,  to  the  valve 
gang,  and  finally  to  the  erecting  gang,  so  that  after  an 
apprentice  is  out  of  his  time  he  is  a  specialist  in  any 
one  of  these  branches. 

This  system  of  apprenticeship  on  the  Grand  Trunk 
has  also  been  found  to  be  the  means  of  parents  giving 
their  sons  who  desire  to  enter  the  service  a  better  edu- 
cation than  formerly.  Before  its  adoption  the  only 
requirement  was  that  the  boy  had  to  be  15  years  of  age. 
It  was  found  that  parents  took  their  boys  away  from 
school  at  12  or  13  years  of  age,  and  put  them  at  some 
other  work  until  old  enough  to  enter  the  Grand  Trunk 
shops.  When  the  examinations  were  first  inaugurated, 
quite  a  number  of  the  boys  were  turned  down,  and  had 


142  TRAINING   OF   RAILWAY    MECHANIClS. 

to  go  back  to  school  again  before  they  could  qualify 
to  enter  the  service. 

Status  of  Apprentice  Improved. 

This  has  not  only  resulted  in  prospective  applicants 
getting  a  better  education,  but  has  elevated  the  moral 
standing  of  the  apprentices'  work,  and  made  the  system 
attractive  to  boys  who  have  passed  the  high  school 
entrance  examination,  and  who,  although  well  advanced 
along  the  lines  of  school  education,  adopt  the  mechanic's 
trade  in  preference  to  other  pursuits. 

In  conclusion,  the  success  of  the  apprenticeship  sys- 
tem is  imperatively  dependent  upon  the  careful  man- 
agement of  the  examinations,  and  the  compulsory 
attendance  at  the  classes  provided  by  the  company  for 
their  education. 


CHAPTER  XII. 
RAILWAY  SITUATION  IN  CANADA. 

Railway  transportation  in  Canada  at  the  present  time 
(1916)  is  deeply  affected  by  extraordinary  conditions 
arising  from  the  European  war.  The  effects  of  the 
great  struggle,  in  which  Canada,  as  an  integral  part  of 
the  British  Empire,  is  an  active  participant,  are  ap- 
parent both  in  the  extent  of  railway  construction  and 
in  the  results  of  railway  operation. 

For  a  number  of  years  prior  to  the  Great  War, 
Canada  had  been  taking  giant  strides  in  railway  con- 
struction. In  1914  the  addition  to  operative  mileage 
was  1,491  miles,  bringing  the  total  up  to  30,795  miles. 
This  is  considerably  more  than  the  mileage  of  the  United 
Kingdom,  and  raises  Canada  to  fifth  place  among  the 
nations  of  the  world  in  the  matter  of  railways.  The  in- 
crement during  the  ten  years  including  1914  amounted 
to  11,364  miles  of  line. 

AVhile  the  distribution  of  this  new  mileage  has  af- 
fected all  the  provinces,  the  west  has  had  over  70  per 
cent  of  it.  That  is  where  the  need  of  the  Dominion  for 
railways  has  existed,  and  still  exists,  as  the  result  of 
rapid  settlement.  It  should  also  be  mentioned  that  dur- 
ing the  last  year  of  which  there  is  an  official  report  309 
miles  were  added  to  second  track,  making  the  total 
2,293,  and  583  miles  to  yard  track,  the  aggregate  of 
which  was  thereby  brought  up  to  7,518  miles. 

143 


144  THE  RAILWAY  SITUATION  IN  CANADA. 

Perhaps  more  striking  than  the  additions  to  oper- 
ative mileage  in  1914  are  the  facts  with  regard  to  Can- 
adian lines  mider  construction.  The  situation  on  June 
30,  1914,  compared  with  the  same  date  in  the  previous 

year,  was  as  follows: 

1913  1914 

New  mileage  surveyed 6,558  11,472 

Under  construction 8,591       5,521 

Completed 2,956       3,417 

In  operation 542      2,443 

Total 18,648     22,853 

The  mileage  noted  as  "in  operation"  refers  to  mileage 
which  had  not  in  1914  been  taken  out  of  the  "under  con- 
struction" classification.  It  is  quite  a  common  thing 
for  the  Canadian  Railway  Commission  to  permit  parts 
of  new  lines  to  handle  traffic  pending  completion  of  the 
whole,  and  also  to  allow  completed  railways  to  be  oper- 
ated for  a  limited  period  by  the  contractors.  It  is  rea- 
sonable to  assume,  however,  that  at  least  10,000  miles 
of  new  line  now  in  various  stages  of  construction  will  be 
added  to  official  operative  mileage  within  the  next  four 
or  five  years.  Of  course,  at  this  juncture,  no  one  may 
say  what  eflFect  the  war  in  Europe  will  have  on  the 
whole  railway  situation,  especially  with  respect  to  the 
availability  of  capital. 

Increased  Capitalization. 

Building  railways  nowadays  is  an  expensive  proceed- 
ing, and  it  is  therefore  not  surprising  that  the  capitah- 
zation  of  the  Canadian  system  was  increased  by  $276,- 
990,000  during   1914.     This  increment  consisted  of 


THE  RAILWAY  SITUATION  IN  CANADA.  145 

bonds,  $169,145,686;  common  stocks,  $97,794,137;  and 
debenture  stock  of  the  Canadian  Pacific  Railway,  $10,- 
050,246.  By  these  additions  the  aggregate  liability  of 
the  Canadian  roads  was  brought  up  to  $1,808,820,761. 
In  addition  there  were  stocks  amounting  to  $64,637,5^0 
and  bonds  totaling  $88,669,809  attached  to  lines  offi- 
cially regarded  as  being  under  construction ;  so  that  the 
final  total  would-be  $1,962,128,070.  It  was  definitely 
ascertained  when  the  last  report  was  made  that  the  in- 
terest on  all  outstanding  bonds  was  paid. 

Dividends  for  the  year  ran  up  to  $30,434,601,  as  com- 
pared with  $27,333,373  in  the  previous  year.  The  force 
of  these  figures  is  accentuated  by  the  fact  that  seven 
years  before  the  aggregate  of  dividends  was  $12,760,- 
435.  The  funded  debt  in  1914  amounted  to  $23,481  per 
mile  of  the  lines  affected,  which  cannot  be  regarded  as 
high.    Stocks  had  an  average  of  $30,138  per  mile. 

Government  Aid  to  Railways. 

The  policy  of  aiding  railway  construction  continues 
in  Canada,  and  in  1914  the  largest  expenditure  for  that 
purpose  was  made  since  government  subventions  were 
begun.  Direct  cash  subsidies  amounted  to  $16,583,059, 
of  which  all  but  $523,260  came  from  the  Dominion 
treasury.  That,  however,  fell  far  short  of  the  contri- 
butions which  were  made  by  the  Dominion  and  the 
provinces  in  the  form  of  guarantees  of  bonds.  Parlia- 
ment voted  $45,000,000  of  guarantees  to  the  Canadian 
Northern  in  May,  1914,  following  very  much  larger  as- 
sistance to  that  company  in  subsidies  and  indorsements 
in  preceding  years.  The  total  accoimt  for  guarantees 
having  legislative  authorization  reached  $406,259,165 


146  THE  RAILWAY  SITUATION  IN  CANADA. 

on  June  30,  1914,  of  which  $188,965,063  stood  in  the 
name  of  the  Dominion.  The  western  provinces  are 
chiefly  involved  in  connection  with  the  remainder,  and 
as  these  guarantees  are  precisely  like  the  indorsements 
made  in  everyday  life  of  promissory  notes,  it  will  be 
seen  that  the  situation  would  be  exceedingly  serious  if 
default  should  be  made  by  the  railways  concerned. 

These  obligations,  however,  represent  two  things: 
The  optimism  of  the  West  and  the  need  for  transporta- 
tion facilities.  And,  as  Mr.  J.  L.  Payne,  Comptroller 
of  Statistics  in  the  Department  of  Railways  and  Canals 
at  Ottawa,  said  recently  in  an  article  for  which  we  are 
indebted  to  the  leading  journal  of  American  transpor- 
tation, the  Railway  Age  Gazette : 

"Under  normal  conditions  nothing  more  will  happen 
than  happens  when  one  friend  indorses  for  another. 
The  West  will  get  its  railways — ^has,  in  fact,  already  got 
thousands  of  miles  of  new  line  by  that  process — and 
the  railway  corporations  will  pay  principal  and  interest. 
The  emphasis  is  on  the  word  'normal.'  It  must  also  be 
borne  in  mind,  before  the  attitude  of  the  Canadian  peo- 
ple in  respect  of  transportation  is  understood,  that  the 
Dominion  government  is  building  the  eastern  section  of 
the  Grand  Trunk  Pacific,  and  has  expended  on  that  ac- 
count $150,000,000;  that  it  has  guaranteed  the  bonds  of 
the  Grand  Trunk  Pacific  for  the  construction  of  the 
western  section,  and  had  actually  purchased  $33,116,000 
worth  of  these  bonds  up  to  June  30,  1914,  in  order  to 
secure  par  value  for  the  company." 

Railway  Earnings  and  the  War. 
The  great  European  war  is,  incidentally,  emphasizing 


THE  RAILWAY  SITUATION  IN  CANADA.  147 

in  Canada  the  intimate  relation  between  trade  and 
traffic.  "Railway  earnings  are  barometric,"  says 
Comptroller  Payne,  "in  their  reflection  of  the  commer- 
cial activities  of  a  people.  They  go  up  or  down  with 
the  fluctuations  of  trade.  This  is  not  generally  under- 
stood. It  cannot  be,  or  there  would  be  a  better  and 
saner  appreciation  of  the  functions  of  our  great  carry- 
ing agencies. 

"When  earnings  are  on  the  ascendant,  there  are  many 
who  fail  to  see  in  that  fact  the  throb  of  national  strength 
and  success.  They  are  apt  to  cry  out  that  the  railways 
are  wringing  too  much  from  the  people  and  must  be  re- 
strained ;  but  in  a  day  of  adversity,  when  earnings  come 
tumbling  down,  they  are  not  sympathetically  disposed 
toward  the  hard-hit  railways.  There  seems  to  be  lack- 
ing that  judicial  view  of  the  case,  which  recognizes  the 
soundness  of  balancing  good  years  against  bad  years." 

The  railways  of  Canada  did  not  earn  quite  as  much 
in  1914  as  they  did  in  1913,  and  in  1915  and  1916  they 
will  inevitably  run  considerably  below  the  record  for 
1914.  This  loss  will  fall  upon  the  people  at  large  with 
just  as  much  severity  as  upon  the  railways.  There  is 
no  industry,  not  even  agriculture,  which  makes  such  a 
wide  distribution  of  its  prosperity  as  does  the  railway 
industry,  and  it  is  equally  true  that  the  pinch  of  railway 
poverty  is  as  quickly  diffused  among  all  classes  of  the 
community.  Under  present  conditions,  therefore,  Can- 
ada has  had  to  learn  a  new  lesson. 

Decline  in  Net  Earnings. 

For  more  than  thirty  years,  with  the  single  exception 
of  1909,  railway  earnings  in  Canada  have  mounted  up- 


14S  THE  RAILWAY  SITUATION  IN  CANADA. 

wards.  During  the  past  ten  years  in  particular  they 
have  made  sensational  leaps.  It  came  therefore  as 
somewhat  of  a  shock — a  disturbing  departure  from  what 
was  accepted  as  the  established  order — to  find  that  for 
the  year  ended  June  30,  1914,  there  was  a  decline  of 
$13,619,164,  or  from  $256,702,703  in  1913  to  $243,083,- 
530  in  1914.  Operating  expenses,  on  the  other  hand, 
were  reduced  by  only  $3,036,431 ;  so  that  net  earnings, 
as  represented  by  the  difference  between  gross  earnings 
and  operating  cost,  fell  off  by  $10,582,733  for  the  year. 
This  result  created  a  serious  jump  in  the  ratio  of  oper- 
ating expenses  to  gross  earnings.  That  ratio  in  1912 
was  68.7;  in  1913  it  rose  to  70.9,  and  in  1914  to  73.6. 

Of  course,  this  setback  happened,  as  has  been  pointed 
out,  after  a  long  period  of  really  remarkable  progress. 
That  progress  is  strikingly  demonstrated  in  the  follow- 
ing statement  of  gross  earnings  per  mile,  which  has  not 
been  included  in  the  official  reports : 

1899 $3,608  1909 $6,018 

1904 5,158  1914 7,894 

The  decline  for  1914  was  equal  to  $866  per  mile.  The 
story  is  succinctly  told  in  the  following  comparison  of 
the  sources  of  earnings  in  1913  and  1914: 

1913  1914 

Passenger  service $  74,431,994  $  72,564,203 

Freight  service 177,089,373  165,753,731 

Station  and  train  privileges       1,566,721  1,044,737 

Telegraphs,  rents,  etc 3,614,615  3,720,868 

Total $256,702,703     $243,083,539 

The  principal  falling  off  was  in  earnings  from  freight 


THE  RAILWAY  SITUATION  IN  CANADA.  U# 

service,  which  was  due  to  the  hauhng  of  5,598,721  tons 
less  than  in  1913.  The  number  of  passengers  carried 
was  actually  some  471,515  more  than  in  the  preceding 
year,  yet  the  volume  of  earnings  from  ticket  sales  de- 
clined by  $2,429,134.  The  reason  for  this  is  found  in 
the  fact  that  the  average  passenger  journey  fell  from 
71  miles  in  1913,  a  comparatively  high  average,  to  66 
miles  in  1914.  That  little  five  miles  seems  to  have  cost 
the  railways  nearly  two  millions  and  a  half  of  dollars. 

Public  Service  of  the  Railways. 

The  following  condensed  facts  with  respect  to  the 
public  service  of  Canadian  railways  in  1914  may  illumi- 
nate the  whole  traffic  situation  in  the  Dominion  at  the 
present  time : 

Tons  hauled 101,393,989 

Passengers  carried 46,702,280 

Tons  one  mile  per  mile  of  line 716,359 

Passengers  one  mile  per  mile  of  line . . .  100,309 

Receipts  per  passenger  per  mile,  cents.  2.007 

Receipts  per  ton  per  mile,  cent .742 

Average  receipts  per  passenger $1,328 

Average  receipts  per  ton $1,614 

Passengers  per  train 59 

Tons  per  freight  train 358 

Tons  per  loaded  car 19.18 

Cars  per  freight  train 18.4 

Average  freight  haul,  miles 217 

Railway  Interests  Centralized 

There  is  a  continuing  tendency  in  Canada  to  cen- 
tralize its  railway  interests.  In  1914,  for  example,  79 
per  cent  of  all  traific  and  earnings  attached  to  three  cor^ 


150  THE  RAILWAY  SITUATION  IN  CANADA. 

porations — the  Canadian  Pacific,  the  Canadian  North- 
ern, and  the  Grand  Trunk.  The  Grand  Trunk  Pacific 
is  counted  in  with  the  Grand  Trunk.  If  seven  other 
units  be  taken  in,  the  ratio  rises  to  92  per  cent,  leaving 
but  8  per  cent  for  all  the  remaining  lines,  nearly  ninety 
in  number. 

This  work  of  absorbing  the  carrying  trade  into  rel- 
atively few  hands  has  been  proceeding  for  a  number  of 
years,  and  has  not  aroused  serious  opposition.  The 
conviction  obtains  in  the  communities  more  or  less  di- 
rectly affected  that  it  has  contributed  to  better  service, 
without  in  any  degree  causing  higher  rates. 

Freight  Rates  in  Canada. 

Taking  up  briefly  the  broad  question  of  freight  rates 
in  Canada,  it  may  be  noted  that  the  average  receipts  per 
ton  per  mile  in  1914,  by  all  the  railways  of  the  Domin- 
ion, were  0.742  cents.  There  has  not  been  any  mate- 
rial change  in  this  fundamental  factor  during  the  pre- 
vious eight  years,  and  information  back  of  that  period  is 
not  available. 

The  tendency  in  rate  adjustments  has  for  a  long 
time  been  downward,  and  while  earnings  were  rising 
steadily,  as  the  result  of  swelling  traffic,  it  would  per- 
haps have  been  unpopular  to  permit  increases.  "Hap- 
pily," says  Comptroller  Payne,  "Canada  escaped  the 
two-cent-per-mile  passenger  rate  agitation  which  over- 
whelmed so  many  of  the  state  legislatures  across  the 
boundary,  and  carried  in  its  train  a  mass  of  admittedly 
meddlesome  and  restrictive  legislation  affecting  rail- 
ways." 

The  rate  situation  in  Canada  may  be  summed  up  in 


THE  RAILWAY  SITUATION  IN  CANADA.  151 

this  conclusion:  While  freight  rates  have  not  in  any 
direction  been  increased,  there  have  been  numerous 
specific  reductions  and  also  changes  of  classification;  so 
that,  on  the  whole,  there  has  been  a  slight  impairment 
of  earning  power.  This  was  not  resisted  by  the  rail- 
ways while  the  tide  of  prosperity  was  running  high ;  but 
the  whole  matter  may  assume  a  different  complexion, 
and  properly  so,  in  the  face  of  serious  reverses.  Since 
the  outbreak  of  the  war,  there  have  been  heavy  declines 
in  earnings,  and  no  one  may  say  when  the  trend  will 
turn  upward.  Of  course,  the  productive  potentialities 
of  the  Dominion  cannot  be  destroyed,  and  the  return  to 
normal  conditions  is  obviously  a  matter  of  time;  but, 
without  reference  to  how  and  when  the  volume  of  traffic 
will  be  restored  to  former  levels,  fair  play  demands  that 
the  persistent  rise  in  the  cost  of  operation  should  be 
recognized  in  its  full  bearing  on  rates. 

Whereas  in  1899  it  cost  77.9  cents  to  run  a  train  one 
mile  in  Canada,  in  1914  it  cost  $1.66 — an  advance  of  113 
per  cent.  During  the  same  period  earnings  per  train 
mile  increased  by  precisely  89  per  cent.  Such  a  dis- 
parity could  only  be  endured  by  the  railways  under 
very  favorable  conditions.  Should  the  very  unfavorable 
conditions  which  have  been  created  by  the  war  and  other 
causes  persist  for  a  term  of  years,  it  is  clear  that  the 
railways  will  be  compelled  to  take  broad  and  compre- 
hensive measures  for  either  the  betterment  of  earnings 
or  the  reduction  of  operating  expenses.  The  larger  not 
only  began  in  1915  the  cutting  down  of  their  working 
staff  where  possible,  coupled  with  the  elimination  of 
certain  trains  and  other  services,  but  they  also  an- 


152  THE  RAILWAY  SITUATION  IN  CANADA. 

noimced  the  imperative  need  for  a  recasting  of  the  scale 
of  compensation  to  employees. 

Vitality  of  Canadian  Roads. 

The  vitality  and  soundness  of  a  large  group  of  rail- 
ways may  properly  be  tested  by  the  same  standards 
which  are  applicable  to  any  one  of  the  imits.  That  is  to 
say,  a  railway  would  be  regarded  as  strong  and  pros- 
perous, if  its  operating  expenses  fell  sufficiently  far  be- 
low gross  earnings  to  leave  a  fair  balance  after  fixed 
charges  had  been  met,  provided  always — and  this  is  ab- 
solutely vital — that  the  balance  to  profit  had  not  been 
realized  at  the  expense  of  physical  property. 

The  railways  of  Canada  would  not  shrink  from  such 
a  test.  Indeed,  they  appear  to  advantage  when  it  is 
applied.  In  1914  the  ratio  of  operating  expenses  to 
gross  earnings  was  73.63  per  cent,  and  that  result  was 
achieved  after  more  than  ordinary  expenditures  had 
been  made  for  the  upkeep  of  roadbed  and  equipment. 
In  other  words,  net  earnings  have  not  been  the  result  of 
an  unsound  policy  with  respect  to  operating  conditions. 

Expenditures  for  Maintenance. 

During  the  five  years  ending  with  the  period  of  the 
last  official  report,  the  outlay  of  the  Canadian  railways 
for  maintenance  of  way  itud  structures  averaged  21.92 
and  20.42  per  cent,  respectively,  of  total  operating  ex- 
penses, and  that  is  somewhat  better  than  the  average  of 
United  States  railways  during  the  same  period. 

In  1914,  for  example,  $35,292,227  was  expended  on 
way  and  structures,  and  $36,375,331  on  maintenance  of 
equipment,  these  outlays  being  equal  to  $1,146.07  per 


THE  RAILWAY  SITUATION  IN  CANADA.  153 

mile  of  line  in  the  first  case,  and  $1,181,121  in  the  sec- 
ond. It  can  be  fairly  said  that  there  has  been  a  per- 
sistent movement  toward  the  best  standards  in  all  serv- 
ice conditions,  and  Canadian  railways  do  not  in  any 
respect  fall  below  those  of  the  United  States  in  all  that 
makes  for  general  efficiency  and  comfort. 

The  additions  to  rolling  stock  made  by  Canadian 
roads  during  the  three  years  ending  1914  have  been  as 
follows:  Locomotives,  1,228;  passenger  cars,  1,849; 
and  freight  cars,  77,032. 

Quite  as  important  as  numbers  has  been  the  rising 
scale  in  capacity  of  both  hauling  and  carrying  units. 
For  example,  the  average  capacity  of  a  car  in  freight 
service  in  1907  was  27.6  tons.  In  1914  it  was  33.2  tons. 
Likewise,  the  average  trainload  has  been  raised  from 
260  tons  in  1907  to  353  tons  in  1914.  The  direct  effect 
of  recent  large  additions  to  equipment  has  been  to  com- 
pletely silence  the  general  outcry  against  car  shortage 
which  had  been  heard  for  many  years ;  but,  owing  to  per- 
haps unavoidable,  but  nevertheless  wasteful,  marketing 
conditions,  this  has  been  achieved  at  the  expense  of  load- 
ing the  railways  with  a  heavy  surplus  of  cars  during  at 
least  four  months  in  the  year.  Some  of  this  new  rolling 
stock  came  from  the  United  States.  The  official  return 
of  imports  from  across  the  line  for  1914  shows  that  Can- 
adian railways  brought  in  166  locomotives,  208  pas- 
senger cars,  4,596  freight  cars  and  4,113  other  cars  from 
the  American  side,  which  made  up  a  total  account  of 
$7,987,877. 

Future  Depends  on  the  War. 

The  Great  War,  following  closely  upon  a  lull  in  high 


154  THE  RAILWAY  SITUATION  IN  CANADA. 

pressure  traffic  conditions — a  lull  which  might  have 
been  wholly  temporary — ^has  disturbed  the  fundament- 
als of  commerce  in  Canada.  One  does  not,  however, 
see  the  effects  very  plainly  as  yet.  Production  seems  to 
be  proceeding.  There  are  not  many  industrial  estab- 
lishments idle.  Business  is  apparently  being  carried  on 
as  usual. 

But  the  railway  barometer  tells  a  plain  story  of  de- 
pression, and  it  is  infallible,  as  the  able  Comptroller  of 
the  Department  of  Railways  says.  "The  pinch  here 
and  the  slackness  there  are  reflected  from  ocean  to 
ocean  in  lowered  freight  earnings.  There  may  not  be 
discouragement — you  certainly  would  not  hear  any- 
thing pessimistic  in  Canada  at  this  time  of  trial — but 
everybody  realizes  that  economy  is  necessary.  At  the 
foundation  of  nearly  all  great  commercial  upheavals  one 
may  find  uncertainty,  and  that  word  expresses  the  sit- 
uation just  now  in  Canada. 

"So  far  as  the  railways  are  concerned,  they  cannot 
possibly  escape  the  constriction ;  and  the  hard  part  of  it 
is  that,  while  many  begrudged  them  a  reasonable  share 
in  the  prosperity  of  the  past  decade  in  particular,  they 
will  look  in  vain  for  general  sympathy  in  any  distress 
which  the  great  European  war  may  force  upon  them. 
War  is  not  like  any  other  disturbing  influence.  Neither 
its  duration  nor  its  consequences  can  be  gauged.  Under 
such  abnormal  conditions  no  one  may  say  what  will  be 
the  position  of  Canadian  railways  even  in  the  near 
future.  Everything  depends  on  what  happens  in 
Europe." 


CHAPTER  XIII. 

RAILWAY  MAIL  SERVICE. 

At  the  time  our  first  railroads  were  opened,  the  mail 
was  carried  on  horseback,  by  sulkies,  stages,  four-horse 
post-coaches,  packets  and  steamboats.  As  the  cities 
which  could  be  served  by  steamboats  were  few  in  num- 
ber, the  expedition  that  could  be  given  the  mail  was 
measured  by  the  speed  and  endurance  of  the  horse.  In 
favorable  weather,  when  the  roads  were  in  good  condi- 
tion, mails  were  carried  with  fair  dispatch,  and  delivered 
promptly  at  the  appointed  time. 

During  a  portion  of  the  year  1833  the  express  mail 
was  carried  from  Philadelphia  to  New  York,  a  distance 
of  ninety  miles,  in  six  hours,  at  an  average  speed  of 
fifteen  miles  per  hour.  But  this,  of  course,  was  an 
extraordinary  performance  and  was  only  warranted  by 
the  disturbed  and  excited  condition  of  pubhc  affairs 
that  then  prevailed. 

This  presents  one  extreme.  The  other  shows  the  all 
but  impassable  roads  of  the  wet  seasons,  the  heavy 
stages  and  post-coaches  scarcely  moving,  often  down  to 
their  very  axles  in  the  mud,  at  the  rate  of  three  or  four 
miles  per  hour. 

Railways  at  First  Unreliable. 

Such  being  the  condition  of  aflFairs,  it  would  naturally 
be  supposed  that  the  mail  would  have  been  wholly  trans- 
ferred to  the  railways  as  soon  as  the  latter  began  opera- 

155 


156  BAILWAY   MAIL   SERVICE. 

tions.  But  such  was  not  the  case.  For  several  years 
the  railways  seem  to  have  been  no  more  expeditious 
or  reliable  than  the  post-riders,  stages,  and  post-coaches. 
As  late  as  the  year  1835,  or  six  years  after  the  success- 
ful trial  of  the  "Stourbridge  Lion"  at  Honesdale,  the 
postmaster-general  threatened  to  remove  the  mails  from 
several  of  the  leading  railways  unless  they  were  for- 
warded with  greater  expedition  and  certainty. 

Two  Early  Speed  Contests. 

This  threat  to  remand  the  mail  back  to  the  stages 
may  seem  strange  in  view  of  the  records  made  in  the  two 
famous  prize  contests  of  Great  Britain  and  the  United 
States.  As  early  as  October,  1829,  in  the  great  Rainhill 
competition,  brought  about  by  the  Liverpool  &  Man- 
chester Railway,  Stephenson,  with  the  "Rocket,"  is  said 
to  have  attained  a  speed  of  twenty-nine  miles  per  hour. 
This  record  was  soon  equaled  in  our  own  country.  Dur- 
ing the  summer  of  1831  there  was  a  contest  just  outside 
of  Baltimore  for  the  prize  offered  by  the  Baltimore  & 
Ohio  Railroad.  One  of  the  contesting  locomotives,  "The 
York,"  built  by  Phineas  Davis,  of  York,  Pa.,  was 
found  capable  of  running  a  short  distance  on  a  straight 
and  level  stretch  of  track  at  the  rate  of  thirty  miles  per 
hour. 

Speed  of  Best  Modem  Trains. 

The  best  locomotives  now  manufactured  can  attain 
and  hold  a  speed  for  a  short  distance  of  certainly  90, 
and  perhaps  even  110,  miles  per  hour,  but  the  average 
running-speed  of  our  fastest  trains  falls  far  short  of 
even  the  lower  of  these  figures.    The  running-speed  of 


RAILWAY   MAIL   SERVICE.  157 

the  fastest  regular  trains  of  the  United  States — and,  it 
might  be  added,  of  the  world, — namely,  those  between 
Atlantic  City  and  Camden,  is  66.8  miles  per  hour.  This 
run  is,  of  course,  only  a  dash,  the  distance  by  the  longer 
route  being  but  59  miles,  with  no  stops  between  the 
termini.  The  running-speed  of  the  Empire  State  Ex- 
press on  its  journey  of  440  miles  from  New  York  to 
Buffalo,  deducting  8  minutes  for  the  four  station  stops 
it  makes,  is  54.2  miles  per  hour,  while  the  running-speed 
of  the  Northwestern  and  Burlington  fast  mail  trains  on 
their  journey  of  490  miles  from  Chicago  to  Council 
Bluffs,  allowing  35  minutes  for  thirteen  station  stops, 
is  51  miles  per  hour. 

When  Horse  Defeated  Engine. 

It  was  not  until  the  first  railways  had  been  in  opera- 
tion for  several  years  that  the  locomotive  fully  estab- 
lished its  superiority  over  the  horse  in  point  of  speed 
and  reliability.  Shortly  after  the  opening  of  the  first 
section  of  the  Baltimore  &  Ohio  Railway  to  Ellicott's 
Mills,  in  the  summer  of  1830,  Peter  Cooper,  running 
the  "Tom  Thumb,"  a  locomotive  of  his  own  construc- 
tion, was  distanced  by  a  powerful  gray  horse  drawing 
a  car,  which,  by  this  victory,  became  famous  and  later 
played  a  conspicuous  role  in  the  public  prints  and  early 
books  on  travel.  Of  course.  Cooper's  discomfiture  was 
due  to  an  accident,  the  slipping  of  the  belt  that  operated 
the  blower.  This,  however,  only  emphasizes  the  point 
that  the  locomotive  could  not  at  that  time  be  counted  on 
for  regular  performances.  In  this  contest  Stockton  & 
Stokes,  the  owners  of  the  horse,  undoubtedly  did  their 
best,  for  they  were  the  great  stage-owners  of  that  day 


l5S  RAILWAY    MAIL   SERVICE. 

and  were  determined  not  to  let  their  mail  contracts  slip 
away  from  them  without  a  supreme  effort  to  retain 
them. 

First  of  Special  Mail  Service. 

On  November  24th,  1837,  it  was  ordered  by  the  post- 
master-general that  one  Hutchinson  be  offered  $350 
for  the  conveyance  of  the  president's  message,  on  the 
first  Tuesday  in  December,  by  express  mail  from  Wash- 
ington to  New  York.  This  mail  was  to  leave  Washing- 
ton at  noon  and  reach  New  York  at  4  a.  m.  the  next 
day.  As  the  distance  was  about  230  miles,  the  average 
speed  stipulated  was  a  little  less  than  14^  miles  per 
hour. 

On  December  12th,  1838,  the  postmaster-general 
approved  the  arrangement  of  the  postmaster  at  Phila- 
delphia for  carrying  the  president's  message  by  special 
mail  on  the  railroad  from  Philadelphia  to  New  York 
in  five  hours  for  $500.  In  1833  the  mail  was  carried 
between  these  cities  by  the  post-riders  in  six  hours. 

As  late  as  1839  the  mail  trains  on  the  South  Carolina 
Railroad  averaged  less  than  11  miles  per  hour  in  run- 
ning from  Charleston  to  Hamburg,  a  distance  of  138 
miles. 

Roads  Had  No  Connecting  Schedules. 

The  running  schedules  of  the  railways  in  those  days 
seem  to  have  been  drawn  up  with  the  idea  of  making 
the  breaks  in  travel  as  frequent  and  as  long  as  possible. 
The  traveler  from  Washington  to  New  York,  on  arriv- 
ing at  Baltimore,  would  be  likely  to  find  that  the  train 
for  Philadelphia  had  just  departed,  and  on  arriving  at 


RAILWAY    MAIL   SERVICE.  159 

Philadelphia  he  would  be  hkely  to  find  that  the  train 
for  New  York  had  just  gone.  Movement  of  trains  dur- 
ing the  night  hours  was  very  Umited,  and  on  almost  all 
railroads  was  wholly  suspended. 

As  late  as  October,  1841,  some  of  the  railways  refused 
to  adopt  schedules  urged  by  the  postmaster-general 
which  would  have  very  materiaDy  expedited  the  mail 
between  Boston  and  Charleston,  because  they  called 
for  night  running.  Shortly  before  this,  one  railway 
offered  to  carry  the  mail  with  night  service  at  $300  per 
mile  per  year,  and  for  $200  if  the  department  would  so 
arrange  the  schedules  that  the  running  would  fall  en- 
tirely between  sunrise  and  sunset. 

First  of  Real  Mail  Service. 

By  1850  a  few  railways  for  the  accommodation  of 
through  mail  and  passengers  ran  trains  at  25  miles  per 
hour.  While  this  would  not  now  be  looked  upon  as 
rapid  running,  it  represented  a  material  improvement, 
and  was  fast  enough  to  win  the  traffic  for  the  railways. 
In  1860  the  postmaster-general  reported  that  an  experi- 
ment was  made  with  a  night  mail  between  New  York 
and  Boston.  The  time  between  these  two  cities  was 
reduced  to  nine  hours.  The  distance  being  about  230 
miles,  the  average  speed  maintained  was  but  little  more 
than  25  miles  per  hour.  The  service  between  New  York 
and  Washington  was  not  so  satisfactory  as  that  between 
New  York  and  Boston.  Twenty  miles  per  hour  seems 
to  have  been  all  the  department  could  secure  from  the 
railways  forming  the  New  York- Washington  route. 


IdO  EAILWAY   MAIL  SERVICE. 

Old  System  of  Handling  Mail. 

The  method  of  handling  the  mail  in  existence  anterior 
to  the  introduction  of  the  railway  postoffices  was  built 
up  about  what  were  known  as  distributing  postoffices. 
From  the  earliest  days  until  the  introduction  of  the  rail- 
way postoffices,  the  great  problem  which  constantly 
vexed  the  postoffice  officials  was  the  sorting  and  pouch- 
ing of  the  mails.  Before  the  mail  can  be  started  on 
its  journey,  it  must  be  pouched.  Now,  obviously,  there 
cannot  be  so  many  pouches  as  there  are  places  for  which 
the  mail  is  destined,  because,  among  other  reasons,  the 
weight  of  the  pouches  would  be  so  many  times  the 
weight  of  the  mail  that  the  means  of  transportation 
would  be  broken  down.  In  many  cases  there  would 
be  a  pouch  for  one  letter.  Under  such  a  system  the 
aggregate  gross  revenues  of  the  Postoffice  Department 
for  many  years  would  not  suffice  to  pay  for  the  pouches. 
That  these  statements  are  true  becomes  apparent  on  a 
moment's  reflection  on  the  final  destination  of  the  enor- 
mous number  of  pieces  of  mail  sent  out  every  day  from 
the  Chicago  and  New  York  postoffices. 

The  Distributing  Office  System. 

As  the  tide  of  emigration  spread  over  the  Mississippi 
Valley,  and  the  number  of  postoffices  multiplied,  dis- 
tribution became  more  and  more  difficult.  Direct 
pouching,  from  each  office  to  every  other  office  for  which 
there  was  any  mail,  became  more  and  more  impossible, 
because  of  the  number  of  pouches  that  would  be  re- 
quired. To  keep  down  the  number  of  bags  the  mail 
was  now  sent  to  the  distributing  postoffices  from  all 


RAELWAY    MAIL   SERVICE.  161 

the  offices  in  the  territory  of  which  this  office  was  the 
center.  Here  the  whole  mass  was  sorted  and  pouched, 
and  then  shipped  to  the  various  distributing  offices 
scattered  about  the  country,  each  one  of  which  acted 
as  a  distributing  center  and  made  up  and  forwarded  the 
mail  to  the  smaller  offices  grouped  about  it. 

Abuses  In  the  Old  System. 

The  emoluments  derived  by  the  postmaster  at  dis- 
tributing offices  consisted  of  a  coramission  on  the  letters 
distributed.  Originally,  the  commission  was  5  per  cent 
on  letter  postage,  paid  and  unpaid.  This  was  after- 
ward increased  by  law  to  7,  and  later  to  1214  P^r  cent. 
It  was  thus  obviously  the  interest  of  the  postmasters  of 
these  offices  to  increase  their  distributing  business  to  the 
utmost;  and,  though  expressly  forbidden  by  the  depart- 
ment to  invite  mail  from  its  legitimate  channel,  this  was 
nevertheless  often  done.  Letters  were  frequently  sub- 
jected to  so  many  distributions  that  the  postage  paid 
on  them  was  entirely  eaten  up.  In  some  cases  the  com- 
missions of  the  postmaster  greatly  exceeded  the  entire 
proceeds  of  his  office,  and  a  balance  had  to  be  paid  him 
from  outside  sources. 

The  Work  of  Reform  Begun. 

In  1851  and  1852  the  postmaster-general  made  a 
strenuous  effort  to  correct  these  evils  and  abuses.  He 
framed  regulations  designed  to  cut  off  unnecessary  dis- 
tribution, with  its  train  of  evils,  and  even  went  so  far 
as  to  remove  summarily  several  conspicuous  post- 
masters for  violating  his  instructions.  The  work  begun 
by  Postmaster-General  Hall  was  carried  on  with  vigor 

I.l.L.  Vol.  8—11 


162  RAILWAY   MAIL   SERVICE. 

by  Judge  Campbell,  who  became  postmaster-general 
in  1853.  He  caused  copies  of  the  distributing  schemes 
used  in  the  distributing  offices,  which  were  then  about 
fifty  in  number,  to  be  sent  to  Washington  for  examina- 
tion. 

Railway  Postoffices  Suggested, 

Mr.  Henry  A.  Burr,  the  topographer  of  the  depart- 
ment, to  whom  they  were  referred,  found  nearly  all  of 
them  grossly  defective  and  productive  of  unnecessary 
distribution,  with  its  attendant  delays  and  expense.  By 
direction  of  the  postmaster-general,  Mr.  Burr  prepared 
new  schemes,  but  in  submitting  them  he  expressed  the 
opinion  that,  so  long  as  the  mails  were  stopped  in  tran- 
sit for  separation,  no  scheme  of  distribution  could  be 
devised  which  would  give  dispatch,  or  prevent  passen- 
gers and  express  matter  from  outstripping  the  mail. 
The  only  effective  remedy  was  the  abrogation  of  the 
distributing  postoffices  and  the  transfer  of  the  work  of 
separation  to  "over  the  car  wheels,"  as  he  expressed  it. 
But  the  force  of  progress  was  yet  too  feeble  to  take  this 
radical  step. 

Abolition  of  Distributing  Offices  Begun. 

In  1857  another  step  forward  was  taken.  In  this 
year  the  number  of  cities  to  which  there  was  direct  mail- 
ing was  greatly  enlarged,  and  on  the  trunk  lines  the 
mails  were  placed  in  charge  of  what  were  known  as 
"express  agents,"  who  went  with  the  mail  and  saw  that 
the  pouches  were  properly  transferred  at  junction 
points.  This  practice  very  largely  reduced  the  quan- 
tity of  mail  that  had  to  percolate  through  the  distribut- 


Railway  mail  service.  163 

ing  postofiices,  and,  so  far  as  it  extended,  prevented 
passengers  and  express  matter  from  making  better  con- 
nections and  thus  outstripping  the  mail.  Direct  mailing 
proved  successful;  it  was  so  far  extended  by  1859  that 
thirteen  of  the  fifty  distributing  offices  were  found  un- 
necessary and  were  accordingly  abolished. 

Start  of  the  Present  System. 

In  July,  1861,  the  overland  mails  began  to  be  carried 
over  the  Hannibal  &  St.  Joseph  Railroad,  this  being 
the  first  railway  to  reach  the  Missouri  River.  The 
railroad  being  new,  and  the  demands  upon  it  being  very 
heavy,  the  trains  were  always  late.  St.  Joseph  being 
the  most  important  distributing  office  in  the  West,  an 
immense  amount  of  mail  arrived  there  every  morning 
by  the  railway.  The  overland  stages  were  scheduled 
to  leave  three  hours  after  the  train  was  due.  All  of  this 
time  was  required  for  the  distribution  of  the  mail,  so 
when  the  trains  were  late,  the  stages,  which  seem  to 
have  run  with  greater  regularity  than  the  trains,  left 
with  only  a  part  or  without  any  of  the  mail.  An  in- 
definite continuance  of  this  state  of  affairs  was  not 
viewed  with  equanimity  by  Mr.  William  A.  Davis,  who 
had  charge  of  the  distribution  of  mail  at  St.  Joseph. 

What  Mr.  Davis  Suggested. 

The  remedy  proposed  by  Mr.  Davis  was  to  have  the 
overland  mail  all  ready  for  the  stages  when  the  train 
arrived.  If  this  were  done,  the  mail  would  not  miss 
the  stage,  even  though  the  train  was  full  three  hours 
late  and  the  stage  started  promptly.  To  save  this  three 
hours  he  urged   the   postmaster   at   St.   Joseph,   and 


164  RAILWAY   MAIL   SERVICE. 

through  him  the  officials  at  Washington,  to  be  allowed 
to  meet  the  mail  on  its  arrival  at  the  eastern  terminus 
of  the  railroad  at  West  Quincy  and  separate  the  mail 
as  the  train  proceeded  on  its  journey  across  the  State 
of  Missouri.  His  requests  were  granted,  and  he  seems 
to  have  lost  no  time  in  putting  his  plans  into  execution. 

The  First  Railway  Postoffice. 

On  August  5,  1862,  he  wrote  the  second  assistant 
postmaster-general  a  brief  account  of  his  experiment. 
He  said: 

"One  of  the  clerks  and  myself  left  here  on  Saturday, 
26th,  so  as  to  be  in  Quincy  on  Monday,  28th  ultimo, 
to  commence  the  distribution  of  the  overland  mail  on 
the  Hannibal  &  Saint  Joseph  Railroad.  Finding  that 
the  mail  cars  had  not  been  arranged  according  to  prom- 
ise made instead  of  going  to  Quincy  I 

proceeded  to  Hannibal,  and  succeeded  in  getting  cars 
temporarily  fixed,  in  which  (though  with  some  incon- 
venience) I  think  the  work  can  be  done  until  the  new 
cars  are  ready.  The  distribution  was  commenced  on 
Monday  at  Palmyra,  and  I  assisted  the  clerk,  going  up 
as  far  as  Clarence,  at  which  place  I  turned  back  with  the 
clerk  who  had  come  down  to  go  up  on  Tuesday ;  assisted 
up  to  the  same  point  on  Tuesday ;  turned  back  and  dis- 
tributed the  mail  going  up  on  Wednesday  myself.  We 
have  now  got  through  with  a  week's  service,  and  can 
confidently  report  that  when  the  accommodations  are 
finished  that  are  promised  by  Mr.  Hayward,  superin- 
tendent of  the  road,  the  distribution  can  be  done  entirely 
to  your  satisfaction." 


HALLWAY    MAIL   SERVICE.  165 

Improvements  Under  Supt.  Bangs. 

The  next  important  advance  in  the  railway  mail  serv- 
ice was  made  in  1875,  and  the  credit  for  it  belongs  to 
Col.  George  S.  Bangs,  who  was  then  superintendent. 

Up  to  the  time  Mr.  Bangs  became  general  superin- 
tendent of  the  railway  mail  service,  the  officials  of  the 
Postoffice  Department  aimed  no  higher  than  to  secure 
for  the  mail  as  great  expedition  as  passengers  could 
obtain  for  themselves.  Mr.  Bangs  was  not  content  with 
this  program.  He  hoped  to  obtain  greater  dispatch  for 
the  mail.  The  mail  business  had  always  been  looked 
upon  as  an  adjunct  of  the  passenger  business.  Mr. 
Bangs  hoped  to  secure  exclusive  mail  trains,  the  depar- 
ture and  arrival  of  which  should  be  timed  to  suit  the 
wants  of  the  Postoffice  Department. 

First  of  Special  Mail  Trains, 

In  1874  he  presented  his  views  to  Postmaster-General 
Jewell,  by  whom  they  were  favorably  received,  and  he 
was  authorized  to  open  negotiations  with  the  New  York 
Central  &  Hudson  River  and  the  Lake  Shore  &  Michi- 
gan Southern  Railroads  for  a  fast  mail  service  between 
New  York  and  Chicago. 

It  was  the  old  story  of  making  bricks  without  straw. 
The  Postoffice  Department  had  no  appropriation  to  pay 
for  such  f acihties,  hence  it  had  to  depend  at  first  on  the 
pubHc  spirit  of  the  railroad  authorities.  Commodore 
Vanderbilt,  the  president  of  the  companies  whose  lines 
were  to  be  used,  had  had  dealings  with  the  Department, 
and  was  perhaps  not  altogether  sanguine  as  to  the  prac- 
tical issue  of  the  experiment,  or  in  respect  to  the  coun- 
tenance  it   would   receive   from    Congress;    but   Mr. 


166  RAILWAY    MAIL   SERVICE. 

William  H.  Vanderbilt,  the  vice  president,  lent  a  will- 
ing ear  to  Mr.  Bangs'  proposition,  and  did  his  utmost 
to  aid  him  in  putting  it  into  effect. 

Commodore  Vanderbilt  a  Prophet. 

Colonel  Bangs  stipulated  that  if  Mr.  Vanderbilt 
would  have  twenty  cars  built  and  the  service  performed, 
all  matter  originating  at,  or  coming  into,  the  New  York 
postofBce,  which  could  reach  its  destination  at  the  same 
time  by  this  line,  should  be  sent  by  this  train,  and  that 
the  railway  companies  could  have  the  right  to  demand 
a  weighing  of  the  mail  matter  at  will,  all  railroads  being 
paid  according  to  weight.  When  the  details  of  the  plan 
were  communicated  to  Commodore  Vanderbilt,  he  is 
reported  to  have  said  to  his  son,  "If  you  want  to  do  this, 
go  ahead,  but  I  know  the  Postoffice  Department,  and 
you  will,  too,  within  a  year." 

Fulfilment  of  the  Prophecy. 

Mr.  Vanderbilt  did  go  ahead.  He  constructed  and 
equipped  the  finest  mail  train  ever  seen  *  *  * 
ran  it  for  ten  months,  never  missed  a  connection  at 
Chicago,  and  was  always  on  time  at  New  York.  He 
did  not  have  to  wait  a  year,  however,  for  a  realization 
of  the  sagacious  old  Commodore's  prophecy.  Within 
three  weeks,  despite  the  indignant  protest  of  Colonel 
Bangs,  the  mails  of  three  States  were  ordered  to  be 
taken  from  this  and  given  to  another  route.  This  was 
denounced  as  a  gross  and  wanton  breach  of  plighted 
faith,  and  its  results  were  far-reaching  and  disastrous. 


RAILWAY   MAIL   SERVICE.  167 

Mr.  Vanderbilt  Withdraws  Train, 

The  Pennsylvania  Railroad,  not  to  be  outdone  by  its 
rival,  also  estabhshed  a  fast  mail  service,  and  thus  there 
was  a  double  service  between  New  York  and  Chicago, 
and  the  outlook  was  bright  for  even  wider  extensions 
of  the  fast  mail  service,  when  Congress,  in  spite  of  the 
efforts  of  the  Postoffice  Department,  passed  an  act 
reducing  by  10  per  cent  the  compensation  to  the  trunk 
hnes  for  carrying  mail.  Very  shortly  after  this  act  was 
passed  the  postmaster-general  received  a  letter  from 
W.  H.  Vanderbilt  which,  after  reciting  the  conditions 
and  circumstances  under  which  the  fast  mail  was 
inaugurated,  closed  as  follows:  "Congress,  by  its  re- 
cent action,  has  expressed  an  unwillingness  to  provide 
suitable  compensation  for  the  service,  and  I  am  there- 
fore obliged  to  notify  you  that  the  fast  mail  train  be- 
tween New  York  and  Chicago  will  be  discontinued  on 
the  roads  I  have  the  honor  to  represent,  after  Saturday, 
July  22,  1876." 

Pennsylvania  Road  Abandons  Service. 

Mr.  Thomas  A.  Scott,  on  behalf  of  the  Pennsylvania 
Railroad  Co.,  sent  in  a  similar  communication  on  July 
15th.  The  Postoffice  Department  being  unable  to  offer 
any  rehef ,  the  fast  mail  service,  which  began  so  auspi- 
ciously on  September  16,  1875,  came  to  an  end  July  22, 
1876.  Colonel  Bangs  was  greatly  disappointed  at  this 
abrupt  undoing  of  all  his  labors,  and  worn  out  by  never- 
ending  toil  and  disheartened  by  the  action  of  Congress, 
he  tendered  his  resignation  and  insisted  on  its  accept- 
ance. 


168  RAILWAY    MAIL    SERVICE. 

Though  then  in  operation  less  than  ten  months,  the 
fast  mail  trains  had  been  in  existence  long  enough  to 
establish  themselves  firmly  in  the  esteem  of  the  business 
world.  They  ran  between  New  York  and  Chicago  in 
twenty-six  hours,  making  connections  at  all  important 
junctions  with  trains  to  and  from  a  vast  territory,  and 
thus  advanced  the  mail  by  twelve,  twenty-four,  even 
forty-eight  hours  for  some  sections  of  the  country.  The 
fast  mail  on  the  New  York  Central  and  the  Lake  Shore 
never  missed  a  single  connection,  and  was  late  at  Chi- 
cago only  three  times,  and  at  New  York  just  once. 

Service  Is  Finally  Restored. 

As  may  be  easily  imagined,  the  discontinuance  of  this 
admirable  service  caused  a  great  deal  of  dissatisfaction 
and  unfavorable  comment.  In  the  following  year  an 
effort  was  made  in  Congress  to  restore  the  service,  and 
an  appropriation  of  $150,000  was  secured  on  March 
3,  1877.  This  money  was  to  be  paid  for  expedited 
service,  and  became  known  as  "special  facility  pay." 
With  this  appropriation  the  department  was  en- 
abled to  restore  the  fast  mail  trains.  In  1884  several 
more  fast  mail  trains  were  secured  in  other  parts  of  the 
country  without  the  use  of  special  funds,  and  since  the 
latter  year  the  service  has  been  so  widely  extended  that 
there  is  now  scarcely  an  important  mail  route  in  the 
country  that  does  not  have  at  least  one  fast  mail  train 
leaving  at  the  time  and  run  at  such  speed  as  will  best 
meet  the  needs  of  the  Postoffice  Department. 


RAILWAY    MAIL    SERVICE.  169 

Modern  Eailway  Mail  Service. 

From  a  place  in  which  there  was  no  separation  of  the 
mail,  the  car  has  become  the  place  in  which  nearly  the 
whole  of  the  work  of  separation  is  performed.  The  mail 
is  now  sent  from  the  stationary  postoffices  with  the  least 
possible  separation.  Broadly  speaking,  the  mail  is  dis- 
tributed for  trains  rather  than  for  cities.  This  allows 
the  mails  to  be  kept  open  at  the  central  office  until 
almost  train  time,  and  greatly  economizes  both  space  and 
labor  in  the  central  office.  The  through  mails,  for  the 
most  part,  do  not  even  pass  through  the  terminal  post- 
office.  Unless  the  interval  between  their  arrival  and 
departure  is  a  very  long  one,  they  are  transferred 
directly  from  one  station  to  another.  Mr.  E.  L.  West, 
one  of  the  division  superintendents  of  the  railway  mail 
service,  says  that  not  more  than  five  per  cent  of  the 
mail  passing  through  Chicago  is  taken  to  the  central 
office,  the  other  95  per  cent  being  transferred  directly 
from  one  train  to  another. 

All  In-Coming  Mail  Is  Sorted* 

Although  the  mail  is  always  received  from  the  city 
postoffices  undistributed,  it  is  never  sent  to  them  from 
the  railway  postoffices  in  this  condition  if  this  would 
involve  any  delay  in  ultimate  dehvery.  On  the  arrival 
in  Chicago  of  the  morning  mail  trains  the  letter  mail 
for  the  business  portion  of  the  city  is  ready  for  the  car- 
riers, and  the  letters  for  the  remainder  of  the  city  are 
sorted  and  are  ready  to  go  at  once  to  their  respective 
stations.  The  postmaster-general  recently  said:  "It 
is  the  intention  eventually  to  absorb  all  the  work  of  city 


170  RAILWAY    MAIL    SERVICE. 

distribution  into  the  railway  mail  service  whenever  the 
mails  can  be  expedited  thereby.'* 

The  ideal  railway  mail  service  of  Colonel  Bangs  is 
now  a  reality.  On  nearly  every  railroad  in  the  United 
States  mail  is  the  favored  traffic.  It  goes  on  the  fastest 
trains,  and  has  the  right  of  way;  no  mail  is  ever  left 
behind,  the  railways  always  furnishing  sufficient  car 
space  regardless  of  the  suddenness  of  the  demand  that 
may  be  made;  these  cars  are  furnished  with  the  best 
appliances  that  art  and  science  afford;  and  the  railroad 
employees  give  the  mail  their  first  attention  on  arrival 
of  trains. 

The  gross  revenue  of  the  railroads  of  the  United 
States  from  the  transportation  of  the  mails  in  1915  ap- 
proximated to  sum  of  $55,000,000. 


DISTRICTS 

ALL  TRAINS 

Cars  and  Contents 

Contents 

Gross  Tons 
One  Mile 

Average 

Tons 
per  train 

Net  Tons 
One  Mile 

Average  Tons  per  Train 

^\ 

Same 

w«k  lut 

Same 
week  last 
month 

2 
3 

NEBRASKA  DIVISION. 
Council  Bluffs-Grand  Island. 
Grand  Island-North  Platte. 

22,104.216 
20,859,713 

1,744 
1,879 

10,216.578 
10.141.462 

807 
913 

452 
578 

558 

032 

2 
3 

4 

Total  Main  Lone 

42,963,929 

1.807 

20.358.040 

857 

508 

592 

4 

•■6 
6 

7 
8 

Branches  South  of  Valley, 
Branches  North  of  Columbus, 
Branches  North  of  Gr'd  Island, 
Kearney  Branch. 

1.838,719 
636,169 
383,993 
236.596 

490 
329 
221 
254 

776,695 
181,729 
89,235 
50.325 

207 
94 
51 
54 

264 
130 
70 
88 

225 
98 
52 
94 

5 
6 
7 
8 

9 

Total  Branches. 

S-,095.477 

371 

1.097.984 

131 

183 

145 

0 

10 
11 

Total  Nebraska  Division. 
Some  Last  Year 

46,059,406 
55,676,999 

1.434 
1.014 

21.456,024 
24,688.974 

668 

450 

486 

10 
11 

12 
13 
14 
15 

16 

WYOMING  DIVISION 
North  Platte-Sidney, 
Sidney-Cheyenne, 
Cheyenne-Laranue, 
Laramie-  Ra  whns. 

17,328,794 
13,099,156 
9,287,Jl8 
16,934.404 

2,011 
2.094 
1,575 
1,491 

8.817.520 
7.074,931 
4,753,292 
8,751,076 

1.023 

1.131 

806 

771 

698 
718 
680 
563 

674 
829 
707 
731 

12 
13 
14 
15 
16 

17 
18 

Tdtal  Mam  Lme, 
North  Platte  Branch 

56,649,672 
77,350 

1,764 
328 

29.396,819 
18,422 

916 
78 

655 

729 
102 

727 

17 
18 

19 
20 

Total  Wyoming  Division. 
Same  Last   Year. 

56,727,022 
31,848,149 

1,753 
1,293 

29,415,241 
34,883,854 

909 

655 

19 
20 

21 
22 
23 
24 

UTAH  DIVISION 
Rawlms-Green  River, 
Green  River-Evanston. 
Evanston-Ogden 

19,333,731 
10,288,244 
6,625,543 

1.560 
1.309 
1.681 

9,899,542 
4,578,048 
2.938,822 

799 
582 
746 

475 
409 
568 

694 
520 
586 

21 

22 
23 
24 

25 

Total  Mam  Line    . 

36,247.518 

1,499 

17,416,412 

720 

467 

620 

25 

26 
27 

Supenor  Branch 
P»rk  City  Branch, 

163,060 
68,264 

1,274 
132 

90,196 
28,638 

705 
55 

284 
172 

643 
75 

26 
27 

28 

Total  Branches. 

231,324 

358 

118,834 

184 

197 

188 

28 

?9 
JO 

Total  Utah  Division 

Same  Last  Year. 

36,478,842 
50,875,091 

1,469 
962 

17,535,246 
24,539,693 

706 

464 

611 

29 
30 

31 
32 
33 

KANSAS  DIVISION. 
Kansas  City  Junction  City. 
Junction  CVty-Ellis, 

8,236,098 
5,942.151 

1,089 
928 

3,275.172 
2.424,955 

433 
379 

389 
341 

406 
407 

31 
32 
33 

34 

Total  Mam  Line 

14.178,249 

1.015 

5,700.127 

408 

366 

4b 
47 
357 
S4 

150 
74 
146 

407 

34 

35 

ft 
37 
38 
39 
48 
41 
42 

Xeaven worth  Branch. 
Topeka  Branch, 
Manhattan  Branch, 
Jtnction  City  Branch. 
Enterprise  Branch. 
Solomon  Branch, 
McPherson  Branch, 
PlainviUe  Branch. 

56,776 
75,622 

1.832 
350.849 
106.139 
688.166 

119 
225 
844 
237-" 
92 
440 
217 
477 

18.671 

16.810 
516,810 

83.ZU0 

297 

129,466 

27,904 
239,824 

30 
50 

393 
03 
15 

162 
57 

166 

52 
86 

349 
64 
40 

HI 
62 

162 

35 
36 
37 
M 
39 
40 
41 
4Z 

43 

Total  Branches, 

2,701.847 

436 

1,032,977 

167 

191 

163 

43 

44 
45 

Total  Kansas  Division. 
Same  Last  Year. 

16.880,096 
20,816,738 

J837 
738 

6,733,104 
8,914,349 

334 

316 

33 1 

298 
373 
487 
307 

44 

45 

46 
47 
48 
49 
50 

COLORADO  DIVISION,     j 
Ellis-Cheyenne-Wells. 
Cheyenne  Wells  Denver. 
Cheyenne- Denver, 
Julesburg- Denver. 

3,936,672 
4,603,244 
4,826,050 
4,149,176 

746 

816 

1.131 

1.038 

1.668,105 
2.136,255 
2,408,081 
1,531.215 

316 
371 
565 
383 

297 
390 
520 
373 

46 
47 
48 
49 
50 

61 

Total  Main  Line. 

17,605,142 

912 

7.743.656 

401 

393 

363 

61 

52 
63 

Colby  Branch. 
BoulderBranch,(Inc.St 

Vrains  Branch), 

266,227 
133.640 

300 
245 

78.293 
57,395 

92 
105 

80 
113 

95 
139 

53 

64 

ToUl  Branches, 

389.867 

279 

135,688 

97 

87 

112 

54 

55 

56 

Total  Colorado  Division. 
Same  Last  Year. 

17,995,009 
23.129.862 

870 
761 

7,879,344 
11,4)8.936 

381 

371 

348 

56 

57 
58 

Total  Main  Lij)B. 
Total  Branches, 

167.644.510 
6.495,865 

1.479 
386 

80,615.054 
2.403,905 

712 
143 

605 
176 

576 
150 

57 
58 

s 

Grand  Total. 
Same  Last  Year. 

174,140,376 
2191346.839 

1,337 
997 

83,018.959 
M4,445,806 

638 

475 

526 

58 
60 

How  Weekly  Account  of  Tonnage  Handled  is  Kept 
by  Railroads. 


How  Comparative  Accounts  of  Operations  Are  Kept  on  the 
Union  Pacific  and  Oregon  Short  Line. 


UNION  PACIRC  R.  R. 


INC. 
OK 

bee. 


OREGON  SHORT  UNE 


« 

INC. 
OR 

■dec. 


AVEMAOE  MIL£8  OPERATCO 
QROM  EARNINGS 
OPERATING  EXPENSES 
NET  EARNINGS 

OPER.  EXP.-MAINTENANCE  OF  WAY 
OPER.  EXP.— MAINTENANCE  Of  EQUIPMENT 
OPER.  EXP.— CONDUCTING  TRANSPORTATION 
OPER.  EXP.-OEJICAAt  EXPENSES 
RATIO  EXPEN8C8  TO  EARNINGS 
FREIGHT  TRAIN  MILEAGE 
FREIGHT  ENGINES  PER  TRAIN 
tfREIGHT  TON  MILEAGE 
FREIGHT-*  REV.  TO  GROSS  TON  MILEAGfc* 
FREIGHT  HATE-COMMERCIAL  (CTS.) 
FREIGHT  TRAFFIC  UNBALANCED 
FREIGHT  CAR  MILES  PER  CAft  />£»  OAf 
FREIGHT— TONS  PER  LOADED  CAR 
FREIGHT-TONS  PER  TRAIg 
FREIGHT  EARNINGS  PER  TRAIN  MILE 
PASSENGER  TRAIN  MILES 
PASSENGER  ENGINES  PER  TRAIN 
PASSENGER  ONE  MILE  INC.  SUBURBAN 
PASSENGER  RATE  (CTS.) 
PASSENGER  AVERAGE  NO.  PER  TRAIN 
PASSENGER  EARNINGS  PER  TRAIN  MILE 
CAR  MIRC  AHO-RCNTAL  OP  eQUIPWCNT 
MILES  PER  FREIGHT  LOCOMOTIVE* 
GROSS  TON  MILES  PER  LB,  COAL* 
GROSS  EARNINGS-WATER  LINES 
OPERATING  EXPENSES-WATER  LINES 
NET  EARNINGS-WATER  UNES 
L9aJ  AM'>  1>^MA9£  -  F^eio**n 


By  this  system  it  is  easy  to  tell  at  a  glance  how  the  business  of  the 
roads  compares  for  stated  periods.  It  is  a  condensed  history  of  the 
entire  business,  prepared  from  the  extended  reports  of  each  depart- 
ment. 


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"This  land  Is  utterly  worthless  for  any  present  pur- 
pose, not  because  it  is  not  fertile,  but  from  the  fact  that 
it  is  inaccessible,  wanting  all  facilities  for  reaching  a 
market.  Now,  by  constructing  this  road  through  the 
prairie,  through  the  center  of  the  state  of  Illinois,  you 
will  bring  millions  of  acres  of  land  immediately  into  the 
market  that  will  otherwise  remain  for  years  and  years 
unsalable." — The  Hon,  Henry  Clay,  urging  the  con- 
struction of  the  Illinois  Central  Railroad, 


CHAPTER  XIV. 

TRANSPORTATION  BY  EXPRESS. 

While  not  directly  controlled  or  managed  by  railroad 
or  steamship  companies,  the  express  service  is  one  of 
the  most  important  features  of  modem  transportation. 
It  has  increased  in  magnitude  despite  the  wonderful 
improvements  which  have  been  made  in  the  freight 
service,  much  of  the  latter  being  now  better  than  the 
express  of  forty  years  ago.  Instead  of  this  improve- 
ment in  the  freight  service  having  the  effect  of  minimiz- 
ing or  retarding  the  express  business,  however,  it  has 
apparently  exerted  an  entirely  opposite  influence. 

First  of  Express  Business. 

WiUiam  Harnden  was  the  first  person  to  engage  in 
the  express  business  in  the  United  States.  This  was  in 
1839,  when  he  established  a  regular  service  between 
New  York  and  Boston.  His  agents  traveled  in  the  ordi- 
nary passenger  cars,  carrying  with  them  packages  of 
goods  for  which  the  shippers  desired  speedier  and  more 
certain  transit  than  the  pioneer  freight  service  afforded. 

Prior  to  this,  conductors  and  baggage  agents  had 
carried  a  lot  of  packages  on  their  trains,  leaving  them 
with  station  agents  to  be  called  for  by  the  parties  to 
whom  they  were  addressed.  It  was  an  unorganized 
traffic,  conducted  solely  as  a  matter  of  acconmiodation. 
There  was  no  fixed  schedule  of  charges,  no  receipts  were 
given  and,  if  a  package  were  lost  or  stolen,  the  sender 
had  no  redress. 

175 


176  TRANSPORTATION    BY  EXPRESS. 

Organization  of  Big  Companies. 

Harnden  inaugurated  a  systematic,  regular  service 
between  New  York  and  Boston,  then  between  New 
York  and  Philadelphia,  and  finally  to  a  few  of  the 
principal  European  ports.  He  had  competitors  almost 
from  the  start.  In  184*0  Alvin  Adams  invaded  the  New 
England  field,  and  shortly  afterwards  Thompson  & 
Co.,  Kinsley  &  Co.,  and  several  other  concerns  were 
also  in  the  field. 

In  1850  the  American  Express  Company  was 
founded  by  the  consolidation  of  the  Livingston  and 
the  Wells  companies.  In  1852  Wells,  Fargo  &  Co. 
started  an  overland  route  to  the  Pacific  coast,  and  in 
1854  Harnden  &  Co.,  Adams  &  Co.,  Thompson  &  Co., 
and  Kinsley  &  Co.  united  under  the  name  of  the  Adams 
Express  Company.  It  was  in  the  same  year — 1854 — 
that  the  United  States  Express  Company  came  into 
existence,  its  field  being  in  the  central  West. 

Business  Keeps  on  Growing. 

These,  with  the  National  Express  Company,  founded 
in  1853,  monopolized  the  express  service  of  the  country 
imtil  1879,  when  the  Pacific  Express  Company  invaded 
the  Southwestern  section.  In  1886  the  Southern  Ex- 
press Company  was  incorporated  and  took  over  the 
Southern  States. 

Since  then,  until  the  advent  of  the  Parcel  Post,  there 
has  been  little  change  in  the  business,  the  companies 
j'^early  growing  larger  and  stronger  as  the  lines  of  rail- 
way on  which  they  operate  expand.  As  each  company 
has  exclusive  contracts  with  the  railroads  over  which 


TEANSPORTATION   BY   EXPBESS.  177 

it  operates,  there  is  little  or  no  chance  for  competition 
on  way  business,  except  as  two  lines  of  road  may  paral- 
lel one  another.      [See  pages  185-186.] 

Eight  Large  American  Companies. 

Ostensibly  the  express  companies  and  those  oper- 
ating railway  and  steamship  lines  are  separate  and  dis- 
tinct organizations,  but  in  many  instances  the  same 
financial  interests  are  prominent  in  both.  This  has 
worked  to  the  benefit  of  the  express  companies  by  as- 
suring permanency  in  their  business  relations  with  the 
transportation  lines. 

There  are  now  eight  companies  engaged  in  the  busi- 
ness of  forwarding  goods  and  valuables  by  express. 
They  are  the  Adams,  American,  National,  Northern, 
Western,  Southern,  Great  Northern  and  Wells-Fargo. 
Each  has  its  well-defined  territory,  and  there  is  a  con- 
cert of  action  among  them  which  prevents  harmful  com- 
petition even  at  the  big  competitive  points.  Several 
companies,  for  instance,  have  entrance  to  New  York 
over  different  lines  of  railroad,  but  the  rate  for  shipping 
goods  from  a  given  point  to  New  York  is  the  same  in 
all  instances. 

General  Terms  of  Contract. 

Contracts  made  between  express  companies  and  rail- 
roads (or  steamship  lines)  stipulate  that  the  express 
company  is  to  have  the  exclusive  right  to  handle  all  the 
express  business  conducted  over  the  transportation  line. 
In  most  instances  the  cars  are  furnished  by  the  rail- 
roads, and  in  a  few  by  the  express  companies,  in  which 
latter  case  there  is  a  mileage  allowance.    The  express 

I.B.L.  Vol.  8—12 


178  TRANSPORTATION    BY   EXPRESS. 

company  collects  and  delivers,  handles,  loads  and  un- 
loads all  goods,  and  assumes  all  risk  of  loss  or  damage, 
except  such  as  may  be  caused  by  the  carelessness  or 
negligence  of  the  railroad. 

The  railroad  hauls  the  express  cars  on  its  express, 
passenger  or  special  trains,  so  as  to  assure  a  fair  mini- 
mum rate  of  speed.  In  return  for  this  service  the  ex- 
press company  pays  the  railroad  from  forty  to  fifty  per 
cent,  of  the  gross  receipts,  binding  itself  to  make  its 
rates  from  fifty  to  one  hundred  and  fifty  per  cent, 
higher  than  would  be  charged  by  the  railroad  for  trans- 
porting the  same  goods  as  freight. 

Main  Source  of  Revenue. 

Express  companies  will  accept  anything,  from  a  dia- 
mond to  an  elephant,  for  shipment,  but  as  a  general  rule 
their  business  is  largely  confined  to  the  transportation 
of  packages.  There  are  certain  grades  of  goods  in  the 
handling  of  which  speed  is  the  main  essential.  The  best 
average  speed  of  fast  freight  trains  is  not  over  fifteen 
miles  an  hour,  while  express  trains  move  at  from  thirty 
to  forty  miles.  The  shipper  who  is  sending  small  quan- 
tities of  goods  and  wants  them  to  land  at  their  destina- 
tion as  speedily  as  possible  naturally  forwards  them  by 
express,  regardless  of  the  increased  charges. 

John  Brown,  in  Chicago,  wants  to  send  a  suit  of 
clothes  to  Thomas  Jones,  in  New  York,  in  a  hurry.  He 
delivers  the  package  to  an  express  company.  Twenty- 
four  hours  later  it  is  in  New  York,  and  within  twenty- 
six  hours  it  is  delivered  at  Jones'  address.  Cost,  50 
cents.  If  it  was  sent  by  freight,  it  would  take  the  bet- 
ter part  of  a  week,  and  then  on  arriving  in  New  York 


TEANSPORTATION    BY   EXPRESS.  179 

would  remain  in  the  freight  house  until  Jones,  called 
for  it. 

Means  of  Transporting  Valuables. 

All  shipments  of  actual  money,  both  specie  and  cur- 
rency, as  well  as  of  valuables  like  diamonds  and  jew- 
elry, are  made  by  express.  The  carriage  charges  are 
based  on  the  value  of  the  package  as  declared  by  the 
shipper,  and  in  event  of  loss,  settlement  is  made  on  the 
same  basis. 

The  practice  of  undervaluing  goods  sent  by  express, 
so  as  to  secure  a  low  rate,  is  both  dangerous  and  illegal. 
A  certain  broker  once  sent  from  New  York  to  New 
Orleans  a  package  which  he  declared  contained  $1,000 
in  currency,  and  paid  for  the  carriage  of  $1,000.  The 
money  disappeared  in  transit,  and  the  shipper  brought 
suit  against  the  express  company  for  $20,000,  the 
amount  which  he  swore  the  package  really  contained. 
In  this  he  was  corroborated  by  the  teller  of  the  bank 
where  he  had  obtained  the  money,  and  who  was  with 
him  when  it  was  delivered  to  the  express  company. 

Charges  Based  on  Risk  Taken. 

All  the  courts  in  succession  ruled  against  the  recov- 
ery by  the  broker  of  more  than  $1,000,  on  the  ground 
that  the  responsibility  of  the  express  company  was  lim- 
ited by  the  broker's  original  declaration,  and  that  its 
charge  was  based  on  that  declaration. 

In  fixing  upon  the  charge  for  the  transmission  of 
valuables,  the  risk  assumed  by  the  company  is  a  factor. 
All  ordinary  packages  are  presumed  to  have  a  value  of 
not  exceeding  $50,  and  the  schedule  of  carriage  charges 


180  TKANSPORTATION    BY   EXPEESS. 

is  made  upon  this  basis.  Occasionally  a  shipper  is 
really  ignorant  as  to  the  value  of  his  package,  and  in 
response  to  the  inquiry  of  the  receiving  clerk,  will  say, 
"I  don't  know."  In  such  case  the  receipt  will  be  made 
out  to  read,  "Value  asked,  but  not  given."  If  such  a 
package  is  lost,  the  shipper  is  limited  to  the  actual  value 
of  the  contents,  which  must  not  exceed  $50.  If  he  had 
given  the  value  at  $100,  he  would  have  been  charged 
more  for  the  transportation  of  the  package,  and  in  event 
of  loss  the  company  would  have  been  responsible  up  to 
$100,  provided  it  could  be  shown  that  the  contents  were 
actually  worth  that  amount. 

Loss  Limited  to  Actual  Value. 

But  the  mere  fact  that  a  shipper  puts  a  fictitious 
value  on  a  package  and  pays  carriage  charges  on  such 
fictitious  value  does  not  entitle  him  to  recover  in  case 
of  loss.  He  must  prove  beyond  question  that  the  pack- 
age actually  contained  the  amount  of  money  or  valu- 
ables as  declared  when  the  shipment  was  made.  For 
the  courts  to  hold  otherwise  would  be  to  place  a  pre- 
mium on  rascality.  Valuable  packages  are  received 
only  when  sealed,  and  consequently  the  agents  of  the 
express  company  have  no  means  of  knowing  what  their 
contents  are.  In  instances  of  this  kind  the  receipts  are 
marked  "Said  to  contain ." 

A  certain  bank  official,  whom  we  will  call  B.,  was 
behind  in  his  accounts,  and  in  expressing  $15,000  to  an- 
other bank  put  up  a  dummy  package,  receiving  from 
the  express  company  a  receipt  reading,  "Said  to  con- 
tain $15,000."  The  package  was  stolen  en  route  by 
an  express  messenger,  who  buried  it  without  opening 


TRANSPORTATION    BY    EXPRESS.  ISl 

it.  The  shipper  made  demand  for  the  money,  and  the 
express  company  was  about  to  settle,  when  the  mes- 
senger, who  was  mider  surveillance  all  the  time,  was 
detected  in  the  act  of  unearthing  his  booty.  When  the 
package  was  opened  it  was  found  to  contain  nothing 
but  newspaper  cut  to  the  size  of  bank  notes.  B.  blew 
his  brains  out. 

Why  Courts  Are  Careful. 

But  suppose  the  messenger  had  not  stolen  the  pack- 
age en  route,  how  would  B.  have  benefited  by  his  trick- 
ery? His  plan  evidently  was  to  claim  substitution  of 
the  bogus  for  the  real  package  by  somebody  in  the 
employ  of  the  express  company.  If  he  could  make  it 
appear  that  he  had  sent  $15,000  out  of  the  bank,  his 
accounts  would  be  all  right,  and  he  was  willing  to  put 
somebody  else  under  suspicion  to  clear  himself. 

Tricks  of  this  kind  were  not  uncommon  in  the  early 
days  of  the  express  business,  and  even  up  to  the  early 
80's.  It  was  the  boldness  with  which  some  of  them 
were  worked  that  led  to  the  "Said  to  contain"  form  of 
receipt,  and  also  the  practice  of  the  courts  in  making 
it  obhgatory,  in  case  of  loss,  for  the  shipper  to  prove 
the  value  of  his  shipment. 

Importance  of  C.  0.  D.  Business. 

It  is  probably  in  the  transaction  of  the  C.  O.  D.  or 
"Cash  on  dehvery"  business  that  the  express  service  has 
its  most  important  field.  It  used  to  be  impossible  to 
transact  a  C.  O.  D.  trade  without  the  express  compa- 
nies to  act  as  trustees  in  forwarding  the  goods  and  col- 
lecting and  returning  the  money  to  the  shippers.    There 


182 


TEANSPORTATION    BY   EXPBESS. 


are  thousands  of  firms  scattered  all  over  the  country 
which  do  business  solely  on  this  basis.  One  Chicago 
firm  fills  C.  O.  D.  orders  by  express  to  the  amount  of 
$250,000  weekly.  There  are  many  other  concerns  in 
Chicago  doing  the  same  kind  of  business,  and  they  thrive 
in  every  large  city. 


POSTMASTER 

H  iwt  dlNwed  in  tO  day*  Mtom  «e 

AUDITOR  PACIFIC  EXPRESS  CO. 

PAC7IC  EXPIKS8  BUILOING 

20tb  aod  Ctark  Am,  ST.  LOUtS^tfD. 


M.  C.  HENLEY,  JUNUFACTURER, 

RICHMOND, 

IMD. 


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(Para  78) 

m 

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t.  O.  D.  M 

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Face  of  C.  O.  D.  Envelope. 


^  PACIFIC  EXPRESS  COMPANY 

Amount  «f  Invoice, 


C^k        M\       Chg*-  ^  Return  of  Money,  S ==~=^ 
m     Wa     MJm    Total  to  be  Collected.    -   %-l^-^=. 


1, 


REMARKS 


'Mi 


II 


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Reverse  of  C.  O.  D.  Envelope. 


If  it  were  possible  to  abolish  the  express  business, 
and  the  Parcel  Post,  the  C.  O.  D.  trade  would  die  out, 
because  there  would  be  no  means  of  establishing  the 


TRANSPORTATION    BY   EXPRESS.  183 

relationship  of  trustee  between  buyer  and  seller — some- 
body to  act  in  the  capacity  of  stakeholder,  as  it  were. 

How  0,  0.  D.  Plan  Works. 

The  Banner  Company,  Chicago,  advertise  to  sell  a 
first-class  watch  for  $10.  Nels  Nelson,  living  in  Minne- 
sota, wants  the  watch,  but  he  doesn*t  know  the  Banner 
Company,  and  is  averse  to  intrusting  his  $10  to  stran- 


100. 

M 

TO  The  Pacific  Express  Co..  dr. 

Far  Freight  on from S 


WayBiU  -Vo-  Tin.tj' 190^ 

deceived  payment  for  the  Cofmpany. 


Expense     -     S- 

C.  O.  D.,     -    S. 

Total,    •    S- 


Receipt  for  C.  O.  D.  Shipment 

gers.  The  Banner  Company,  on  the  other  hand,  does 
not  know  Nelson  and  is  not  going  to  send  the  watch 
to  him  without  good  assurance  that  the  money  will  be 
paid.    What  is  done? 

The  Banner  Company  delivers  the  watch  to  the  ex- 
press company,  addressed  to  Nelson  at  his  Minnesota 
home,  with  a  bill  for  $10.  The  watch  is  sent  to  the  com- 
pany's agent  in  the  Minnesota  town,  who  notifies  Nel- 
son of  its  receipt.  Mr.  Nelson  goes  to  the  express  office, 
pays  the  $10,  and  gets  the  watch. 

By  this  plan  the  seller  does  not  trust  the  buyer; 
neither  does  the  buyer  trust  the  seller.  There  is  no 
payment  of  money  until  the  article  ordered  is  actually 


184  TRANSPORTATION    BY   EXPRESS. 

in  the  possession  of  the  buyer.  The  money  is  then  re- 
turned to  the  seller  by  the  express  company  and  the 
transaction  is  ended. 

Profitable  to  Express  Companies. 

What  does  the  express  company  get  for  this  service? 
The  charge  for  a  double  haul.  Instead  of  getting  paid 
for  the  carriage  of  the  watch  to  destination  only,  as 
would  be  the  case  if  the  buyer  had  remitted  in  advance, 
it  collects  a  second  charge  for  the  return  of  the  money. 

If  the  regular  charge  for  the  carriage  of  a  watch  from 
Chicago  to  Brainerd,  Minn.,  is  25  cents,  there  would 
be  a  charge  of  25  cents  for  the  return  of  the  money, 
thus  virtually  doubling  the  revenue  of  the  express  com- 
pany from  its  C.  O.  D.  business. 

As  a  rule,  the  outward  charge — ^that  on  the  article 
itself — is  paid  by  the  seller,  while  the  buyer  pays  for 
the  return  of  the  money.  In  a  few  instances,  where 
the  profit  is  large  enough  to  admit  of  it,  the  seller  pays 
both  charges. 

Business  in  Money  Orders. 

Issuance  of  money  orders  is  another  important  item 
of  express  business.  Owing  to  the  well-known  solvency 
of  these  companies,  their  orders  pass  current  as  cash  in 
all  parts  of  the  country.  If  a  man  in  St.  Paul  owes  a 
bill  of  $5  in  Boston,  and  has  no  bank  account,  he  can 
buy  an  express  order  for  the  amount — ^it  will  cost  him 
$5.05 — and  mail  it  to  his  creditor  in  Boston,  who  will 
receive  it  the  same  as  cash. 

According  to  government  reports,  the  issue  of  money 
orders  in  one  year  recently  numbered  about  6,000,000, 


TRANSPORTATION    BY   EXPRESS.  185 

while  over  20,000,000  way-bills  were  issued  for  money 
shipments.  The  money  value  of  these  orders  and  way- 
bills it  is  impossible  to  obtain. 

The  total  mileage  covered  by  the  express  companies 
in  the  United  States  and  Canada  in  the  year  1914  was 
305,690  miles,  including  7680  miles  of  electric  lines, 
40,220  miles  of  steamboat  lines,  and  896  miles  of  stage 
lines.  Since  that  time,  however,  the  United  States  Ex- 
press Company,  operating  over  30,938  miles  of  trans- 
portation lines,  has  retired  from  the  business,  owing  to 
the  competition  of  the  Parcel  Post,  while  the  property 
of  the  National  Express  has  been  leased  to  the  Ameri- 
can Express  Company. 


The  United  States  Parcel  Post 
With  the  inauguration  in  recent  years  of  the  United 
States  Parcel  post,  which  includes  a  coUect-on-delivery 
service,  the  golden  era  of  prosperity  for  most  of  the  ex- 
press companies  passed  into  history.  Those  which  re- 
main in  the  business  have  been  compelled  to  revise  their 
rates  in  many  cases,  and  to  make  a  stronger  appeal  to 
the  business  community  and  the  public  at  large,  in  the 
direction  of  more  efficient  as  well  as  cheaper  service, 
while  observing  greater  economy  in  management  in  or- 
der to  meet  the  new  conditions  of  Government  com- 
petition. 

The  domestic  Parcel  Post  offers  a  convenient, 
quick,  and  efficient  means  of  transporting  mailable  par- 
cels to  any  postoffice  in  the  United  States  or  its  posses- 
sions. The  service  reaches  more  places  than  any  other 
transportation  agency.  Special  treatment  and  advan- 
tages are  accorded  to   shipments  of  farm  products 


186  TRANSPORTATION  BY  EXPRIML 

weighing  between  20  and  50  pounds.  Low  postage 
rates,  based  on  the  service  rendered,  are  provided,  on 
the  zone  system;  the  rates  to  nearby  zones  being  par- 
ticularly advantageous.  Parcels  may  be  insured  against 
loss  and  may  be  sent  C.  O.  D. 

For  Parcel  Post  purposes  the  United  States  is  di- 
vided into  units  of  area  thirty  minutes  (30')  square. 
Such  units  form  the  basis  of  the  eight  postal  zones.  To 
ascertain  in  which  zone  a  postofBce  is  located  from  the 
ofBce  of  mailing,  a  Parcel  Post  Guide  and  map  are 
jointly  used.  The  guide  applies  to  all  offices,  but  a 
separate  map  is  required  for  each.  unit.  A  zone  key  is 
furnished  with  the  guide  for  use  in  the  imits  of  area  in 
which  some  of  the  largest  postoffices  are  located,  and 
makes  the  map  for  those  units  imnecessary.  Th  e  guide 
and  maps  are  published  by  the  Government,  and  may 
be  piu'chased  on  application  to  the  Third  Assistant 
Postmaster-General,  Washington,  D.  C. 

Domestic  Parcel  Post  mail  is  known  as  fourth-class 
matter  and  includes  all  farm  and  factory  products  (and 
books)  not  now  embraced  by  law  in  either  the  first  or 
second  class  or  (with  the  exception  of  books)  in  the 
third  class;  not  exceeding  fifty  pounds  in  weight  when 
mailed  for  delivery  within  the  first  or  second  zones,  nor 
exceeding  twenty  pounds  in  weight  when  mailed  for  de- 
livery within  any  of  the  other  zones ;  nor  greater  in  size 
than  84  inches  in  length  and  girth  combined,  nor  in  form 
or  kind  likely  to  injure  the  person  of  any  postal  em- 
ployee or  to  damage  the  mail  equipment  or  other  mail 
matter,  and  not  of  a  character  perishable  within  the 
period  reasonably  required  for  transportation  and  de- 
livery. 


CHAPTER  XV. 

RAILWAY  CROP  REPORT  BUREAUS. 

Every  "granger"  railroad  gives  a  great  deal  of  atten- 
tion to  crop  reports,  and  maintains  a  well-organized 
bureau  for  their  systematic  collection.  A  "granger" 
road,  be  it  understood,  is  one  the  bulk  of  traffic  over 
which  consists  of  agricultural  products,  and  which  ope- 
rates in  a  strictly  agricultural  country.  The  Union 
Pacific,  so  far  as  its  Nebraska,  Wyoming,  Kansas  and 
Colorado  divisions  are  concerned,  is  a  "granger"  road. 

Keeping  track  of  the  crops  is  an  important  item  in 
the  operation  of  a  railroad  running  through  an  agricul- 
tural district.  It  is  a  never-ending  work.  It  begins 
with  an  estimate  of  the  acreage  to  be  tilled  the  coming 
season,  and  how  it  will  be  divided  as  regards  the  various 
crops.  Then  follows  news  as  to  seeding  and  planting, 
cultivation  through  the  various  stages,  and  at  last  the 
harvesting.  Nor  does  this  end  it.  When  the  crops  are 
garnered  reports  must  be  made  regularly  as  to  the 
manner  in  which  they  are  being  moved  to  market,  the 
amount  left  on  hand,  etc.  And  when  this  is  completed, 
it  is  time  to  begin  over  again  on  another  crop  year. 

System  of  Union  Pacific  Reports. 

On  the  Union  Pacific  reports  are  made  weekly  by  the 
various  station  agents — ^there  are  many  hundreds  of 
them — to  the  division  superintendents.  These  officials 
in  turn  submit  the  reports  to  the  general  superintendent, 

187 


188  RAILWAY     CROP     REPORT     BUREAUS. 

by  V.  horn  they  are  turned  over  to  the  crop  news  bureau 
for  compilation. 

Let  us  assume  that  it  is  corn-planting  time.  The 
acreage  has  been  previously  estimated,  but  now  the  sta- 
tion agent  knows  exactly  what  acreage  to  report  as 
being  planted.  His  district  is  comparatively  small  and 
it  is  easy  to  ascertain  just  how  much  corn  each  farmer 
is  "putting  in."  There  are  only  ten  large  corn  pro- 
ducers transacting  business  at  this  particular  station, 
and  the  agent  learns  that  between  them  they  will  plant 
1,000  acres,  as  compared  with  750  the  preceding  year. 
His  report  to  division  headquarters  will  read  about  as 
follows : 

Miller's  Corners,  Neb. — Corn  planting  in  full  swing; 
weather  favorable;  ground  in  good  condition  owing  to 
recent  rains.  Increase  of  25  per  cent  in  acreage  over 
last  year.    Total,  1,000  acres. 

Eeports  Cover  Territory  Thoroughly. 

While  the  agent  at  Miller's  Corners  is  collecting  and 
forwarding  this  information,  his  brother  agents  on  the 
same  division  are  furnishing  the  division  superintendent 
with  similar  reports.  By  the  time  all  these  reports  are 
in,  the  division  superintendent  has  an  accurate,  compre- 
hensive idea  as  to  crop  conditions  on  his  part  of  the 
road.  From  the  mass  of  reports  it  is  easy  to  prepare 
a  general  summary  of  each  division  about  as  follows: 

Eighty-nine  out  of  100  stations  on  the  Nebraska 
division  of  the  Union  Pacific  report  an  average  in- 
crease of  20  per  cent  in  corn  acreage  planted.  Crop 
generally  in,  and  weather  and  soil  conditions  favorable. 
Six  stations  report  same  acreage  as  last  year,  and  five 


RAILWAY     CROP    REPORT    BUREAUS.  189 

a  decrease  of  10  per  cent,  with  weather  and  soil  condi- 
tions adverse. 

Meanwhile  similar  information  is  being  secured  and 
tabulated  from  all  the  divisions  of  the  road  running 
through  agricultural  territory,  particular  prominence 
being  given  to  the  crops  of  most  importance  in  their 
respective  localities. 

Compilation  of  the  Reports. 

At  general  headquarters  the  various  division  reports 
are  compiled  and  tabulated  into  one  general  report,  cov- 
ering the  entire  road.  The  crop  report  bureau  is  pro- 
vided with  blanks  on  which  are  spaces  headed :  Wheat, 
Corn,  Oats,  Rye,  etc.  There  are  also  spaces  headed 
Temperature  and  Rainfall.  In  these  various  spaces  the 
net  condition  of  each  crop  is  entered  by  divisions.  When 
filled  out,  the  crop  report  blank  looks  about  as  follows : 

Crop  and  Weather  Report  for  Week  Ending  Thursday, 
September  24,  1915. 

Wheat         Corn  Rye         Barley     Temperature  Eainfall 

Inches 
Neb.   Div +3%        +11%        —1%        —5%  60—88"       0-— .50 

This  shows  that  the  wheat  condition  is  3  per  cent 
and  corn  11  per  cent  better,  while  rye  is  1  per  cent  and 
barley  5  per  cent  less  than  at  the  preceding  report.  The 
temperature  for  the  week  ranged  from  60  to  88,  while 
the  rainfall  was  %  inch. 

Scope  of  the  Reports. 

Under  the  statistical  report  from  each  division  there 
is  a  running  comment  as  to  general  conditions  prevailing 
on  that  particular  division.    A  drouth,  say,  has  retarded 


190  RAILWAY     CROP    REPORT     BUREAUS. 

crop  progress  on  the  Wyoming  division.  This  would 
be  noted  as  follows: 

Drouth  still  general,  though  broken  in  a  few  places 
by  slight  showers.  Planting  is  greatly  delayed,  and 
acreage  will  be  largely  curtailed. 

These  reports  are  made  up  with  special  reference  to 
the  crop  season.  If  it  is  planting  time,  they  refer 
chiefly  to  seeding  and  planting :  at  harvest  time  they  give 
harvesting  conditions,  and  at  other  seasons  reports  are 
made  as  to  movement  of  crops  to  market,  amount  left 
in  farmers'  hands,  etc.  Every  week,  all  through  the 
busy  part  of  the  year,  the  station  agents  must  keep 
headquarters  advised  as  to  crop  conditions. 

Purpose  of  Making  Reports. 

It  is  in  the  harvesting  season  that  there  is  the  greatest 
activity  in  collecting  the  reports.  Railroads  are  vitally 
interested  in  knowing  exact  conditions,  so  cars  may  be 
placed  at  the  points  where  most  needed.  The  acreage 
reports  at  planting  time  give  the  railroad  operators  a 
fair  idea  as  to  whether  new  cars  should  be  ordered;  the 
harvest  conditions  show  where  they  should  be  distrib- 
uted. 

When  the  planting  reports  show  a  large  increase  in 
acreage,  with  conditions  favorable,  the  wise  railway 
executive  orders  a  lot  of  new  cars,  so  as  to  be  able  to 
move  the  increased  crop  which,  barring  unusual  con- 
tingencies, is  sure  to  tax  the  capacity  of  the  road  at 
harvest  time.  By  keeping  in  close  touch  with  condi- 
tions throughout  the  growing  season,  railway  men  know 
to  a  certainty  as  the  harvest  approaches  whether  these 


RAILWAY     CROP    REPORT     BUREAUS.  191 

new  cars  will  be  needed  and,  if  so,  at  what  points  on 
the  road. 

Condensed  Into  General  Reports. 

Crop  reports  on  the  Union  Pacific  system  proper 
are  collected  by  the  Union  Pacific,  the  Oregon  Short 
Line  and  the  Oregon  Railway  &  Navigation  Co.  The 
information  obtained  along  each  division,  after  being 
tabulated  for  each  division,  is  also  summarized  for  the 
road  in  general.  Thus,  on  the  four  agricultural  divi- 
sions of  the  Union  Pacific — Xebraska,  Wyoming,  Kan- 
sas and  Colorado — there  might  be  a  wide  variance  in 
crop  conditions.  On  one  division  these  conditions  might 
be  favorable,  on  another  the  opposite.  The  crop  report 
bureau  experts  strike  an  average  so  that  the  general 
condition,  as  well  as  the  local  conditions,  existing  over 
the  entire  road,  may  be  ascertained.  Both  reports  are 
essential.  The  operators  of  the  road  must  know 
whether  they  need  new  cars;  they  must  also  know  at 
what  points  on  the  road  the  traffic  will  be  the  heaviest. 

Information  In  General  Reports. 

These  general  reports  are  made  up  as  follows,  and 
then  signed  by  the  director  of  maintenance  and  opera- 
tion: 

Union  Pacific — Generally  clear,  warm  weather  favor- 
able to  rapid  maturity  of  corn,  which  is  being  cut  in 
some  locahties;  practically  no  danger  now  from  frost; 
at  least  average  yield  of  good  quahty  should  be  reahzed. 
Fall  plowing  in  progress  generally,  except  in  some  parts 
of  Nebraska  where  soil  needs  rain.  Good  crop  of  sugar 
beets  and  potatoes  being  dug.    Live  stock  in  good  con- 


192  EAILWAY     CROP     REPORT     BUREAUS. 

dition.  Cars  loaded  on  all  divisions :  Increase,  merchan- 
dise, 15  per  cent;  miscellaneous,  168  per  cent;  decrease: 
wheat,  3  per  cent ;  corn,  60  per  cent ;  stock,  1  per  cent ; 
commercial  coal,  63  per  cent;  interchange,  45  per  cent. 
Freight  traffic  increased  6  per  cent;  passenger  travel  in- 
creased 4  per  cent. 

Oregon  Short  Line. — Weather  cool,  with  heavy- 
showers  in  some  places.  Soil  in  good  condition  for  fall 
plowing;  farmers  sowing  fall  grain  in  some  sections. 
Heavy  shipments  sugar  beets  to  factories  and  fruit  to 
market  being  made.  Live  stock  and  ranges  in  good  con- 
dition. Mining  industries  continue  fair;  somewhat  im- 
proved in  Nevada.  Coal  mines  still  closed  account 
miners'  strike.  Cars  loaded  on  O.  S.  L. :  Wheat,  other 
grain,  and  hay,  358  cars,  versus  260  same  week  last 
year;  coal,  99  vs.  668.  Freight  traffic  decreased  20  per 
cent ;  passenger  travel  increased  slightly. 

Oregon  R.  R,  ^  N.  Co. — Harvesting  completed  and 
farmers  are  hauhng  grain,  picking  fruit,  and  prepar- 
ing for  fall  plowing;  latter  to  begin  when  heavy 
rains  improve  soil  conditions.  Heavy  increases  in 
acreage  fall  grains  expected  this  year  to  offset 
losses  this  season's  spring  grain  crop,  which  was 
ruined  by  drought,  but  fall  grain  hardly  affected. 
Greneral  rain  needed  to  moisten  soil.  Cars  loaded 
all  divisions:  Grain  average — Hay  104,  +4%; 
lumber  547,  +6% ;  stock  165,  +170% ;  coal  48,  —32% ; 
fruit  31,  —-34%;  ore  78,  — 25^^;  merchandise  577, 
+24i%;  miscellaneous  1,025,  +29%;  total  3,233, 
+84%.  Freight  traffic  increased  18%;  passenger 
travel  increased  15%. 


RAILWAY     CROP     REPORT     BUREAUS.  193 

Of  Benefit  to  All  Classes. 

Reports  of  the  same  general  nature,  made  by  all  rail- 
roads operating  in  agricultural  territory,  are  of  great 
value  to  the  country  generally.  All  classes  of  people 
profit  by  them.  If  crops  in  certain  sections  are  good, 
the  merchants  sohcit  trade  in  those  sections  to  the  exclu- 
sion of  others,  knowing  that  the  people  will  have  money 
with  which  to  supply  their  wants.  JVIill  and  factory 
owners  watch  the  crop  reports  closely  and  govern  their 
operations  by  them.  There  is  no  use  in  producing  large 
stocks  of  goods  unless  there  is  money  in  the  country 
to  buy  them,  and  hence  every  worker,  every  laborer,  is 
dependent  to  a  degree  upon  the  crops  for  the  perma- 
nency of  his  employment. 

Compiled  originally  for  the  exclusive  use  of  the  rail- 
roads themselves,  these  crop  reports  now  find  a  much 
wider  use.  They  have  become  an  important  factor  in 
all  board  of  trade  operations.  Men  buy  and  sell  grain 
and  other  farm  products  on  crop  reports.  Even  such 
mammoth  concerns  as  the  United  States  Steel  Corpora- 
tion are  affected  by  them — the  better  the  crops  the 
larger  the  demand  for  steel  rails  and  cars,  and  the 
stronger  the  demand  for  steel  products  the  more  men  can 
be  employed,  and  the  larger  will  be  the  profits  made. 


I.B.L.  VqI.  8—13 


"I  do  not  know  how  the  railroad  employes  would  like 
government  ownership.  I  should  think  they  would  view 
such  a  suggestion  with  great  alarm.  I  am  unalterably 
opposed  to  it.  It  would  place  too  vast  a  power  in  the 
control  of  the  President.  It  would  lead  to  a  manage- 
ment of  railroads  not  nearly  so  effective  as  that  which 
we  have  under  private  ownership,  and  it  would  involve 
the  government  in  an  enormous  debt.  It  would  make 
railroad  empWes  government  servants  and  would  sub- 
ject them  to  the  dangers  of  political  supervision  in  a 
way  that  certainly  would  be  most  inimical  to  their  inter- 
ests. It  would  revolutionize  the  whole  vast  railroad  sys- 
tem of  the  country."— T//^  Hon.  William  H,  Taft, 
President  of  the  United  States, 


CHAPTER  XVr. 

FIXING  VALUE  OP  RAILROADS. 

It  is  not  in  the  original  cost  of  a  railway,  nor  in  the 
condition  in  which  maintained,  but  in  the  extent  to  which 
it  serves  to  effectuate  interchanges  that  a  railway  has 
value.  The  value  of  a  railway  lies,  then,  not  in  its  phy- 
sical property,  but  in  the  use  of  that  property.  Value 
begins  with  use  and  increases  as  use  increases. 

*'But  the  value  of  property  results  from  the  use  to 
which  it  is  put  and  varies  with  the  profitableness  of  that 
use,  present  and  prospective,  actual  and  anticipated. 
There  is  no  pecuniary  value  outside  of  that  which  re- 
sults from  such  use."  (C,  C,  C.  &  St.  L.  Ry.  v. 
Backus,  154  U.S.,  445) 

The  things  that  secure  a  broad,  extensive  and  profit- 
able use  are,  therefore,  the  things  which  give  value  to 
a  railway.    Among  these  are : 

1.  Location  of  the  railway  with  reference  to  natural 
resources  producing  traffic. 

If  two  men  were  each  to  start  to  construct  a  railway 
in  a  country  devoid  of  transportation  facilities,  one  or 
the  other  would,  in  the  exercise  of  a  superior  judgment, 
so  locate  his  railway  as  to  obtain  a  more  profitable 
traffic.  This  is  an  advantage  of  judgment  which  should 
apparently  receive  proper  compensation. 

Location  of  Route  Important. 

2. — Location  of  the  route  selected  with  reference  to 
economical  construction  and  service. 

195 


196  FIXING   VALUE   OF   RAILROADS. 

Almost  any  two  communities  which  might  exchange 
traffic  are  connected  by  several  routes,  but  there  is 
always  one  route  over  which  the  railway  can  be  built 
most  economically  and  perform  the  serv^ice  at  least 
cost.  The  route  which  is  superior  today  may  become 
inferior  in  the  near  future  through  the  development  of 
business  to  a  volume  which  would  warrant  construction 
over  a  more  costly  route  in  order  to  obtain  more  econo- 
mical operating  conditions.  The  selection  of  the  par- 
ticular route  which,  while  sufficiently  adapted  to  the 
conditions  of  the  time,  also  provides  as  far  as  may  be 
for  future  growth,  involves  a  very  high  type  of  business 
judgment  and  one  which  cannot  be  enlisted  in  the  public 
service  unless  the  opportunity  for  reward  is  left  open. 
The  most  desirable  route  at  any  given  time  is  that 
which  gives  the  greatest  traffic  per  dollar  of  necessary 
investment. 

3. — Suitable  construction  and  equipment. 

Equipping  the  railway  with  such  terminal  facilities, 
passing  tracks,  rolling  stock,  and  other  appliances  as  are 
best  adapted  to  the  needs  of  the  traffic. 

4. — Such  combination  of  capital  and  labor,  and  effici- 
ency of  management  as  will  secure  the  maximum  traffic 
per  dollar  of  expenditure. 

This  involves  good  service,  a  fair  wage,  reasonable 
rates,  and  the  maintenance  of  good  relations  with  the 
investing  public,  employees,  shippers  and  connecting 
lines.  It  is  a  combination  of  all  these  factors  which 
secures  the  cheapest  cost,  the  highest  wages  and  the  best 
profits. 


FIXING   VALUE    OF    RAILROADS.  197 

Capital  Needs  Encouragement. 

The  question  is,  shall  the  railways  be  permitted  that 
profit  which  is  the  ordinary  reward  of  effective  manage- 
ment, and  hope  of  which  is  the  only  means  of  securing 
the  greatest  production  per  dollar  expended,  or  shall 
they  be  limited  to  an  investment  return  on  the  capital 
employed? 

Capital  cannot  be  interested  in  any  undertaking  if  its 
maximum  reward  is  hmited  to  an  investment  return 
unless,  at  the  same  time,  it  is  reasonably  assured  that  it 
will  not  get  less.  Such  an  assurance  cannot  be  had 
under  the  conditions  at  present  surrounding  railways. 

While  the  existence  of  a  railway  renders  the  building 
of  another  in  the  same  locality  less  probable,  the  possi- 
bility of  rivalry  grows  as  success  becomes  assured  or  in- 
creases. Previous  occupancy  gives  no  prescriptive  right. 
This  competition  is  not  limited  to  a  parallel  line,  but 
may  be  that  of  a  Une  seeking  to  market  the  surplus 
products  of  a  community  not  served  by  both.  In  either 
case  the  original  line  suffers  a  reduction  in  tonnage  and 
a  corresponding  loss  of  revenue  unless  rates  are  in- 
creased. This  loss  may  not  only  prevent  any  return  to 
the  investor,  but  may  even  cause  insolvency.  It  will 
continue  until  traffic  increases  sufficiently  to  support 
both  lines.  In  hke  manner  competition  may  develop 
through  the  combination  of  two  or  more  existing  fines 
for  through  service,  and  with  the  same  disastrous  results 
to  the  investor  in  the  original  railway.  Capital,  there- 
fore, incurs  risks  which  must  be  compensated  if  addi- 
tional capital  is  to  be  secured,  either  for  the  construction 
of  new  fines  or  the  extension  and  betterment  of  those 


198  FIXING    VALUE    OF    RAILROADS. 

already  constructed — both  of  which  are  necessary  to 
handle  rapidly  increasing  traffic. 

Must  be  Profit  in  Investment. 

Further,  unless  there  be  a  profit  beyond  the  invest- 
ment return,  there  is  no  reward  for  the  conception  of  the 
undertaking,  its  economical  construction,  the  subsequent 
additions  of  improved  machinery  and  appliances,  the  in- 
troduction of  economies  of  operation,  nor  the  mainte- 
nance of  harmonious  relations  with  the  public  and  con- 
necting lines,  all  of  which  are  necessary  to  secure  the 
greatest  amount  of  traffic  per  dollar  expended. 

No  railway  can  be  required  to  move  any  traffic  at  less 
than  the  cost  of  the  service  performed,  plus  a  fair  return 
on  the  fair  value  of  that  which  is  employed  in  rendering 
such  service. 

Thus,  in  approaching  the  question  of  valuation  of 
railways,  we  must  bear  in  mind  that  commerce  cannot 
exist  without  transportation  facilities;  that  adequate 
transportation  facihties  cannot  be  had  unless  capital  is 
attracted,  and  unless  sufficient  inducements  are  offered 
to  secure  effective  management. 

What  is  Fair  Valuation? 

The  following  questions  present  themselves:  Can  a 
"fair  valuation"  be  made?  By  what  method  should  it 
be  reached  ?  For  what  practical  purposes  can  it  be  used  ? 
By  whom  should  it  be  undertaken? 

Accurate  nomenclature  is  the  beginning  of  profitable 
discussion.  No  benefit  will  result  from  any  argument 
unless  the  participants  have  a  common  understanding 
of  the  terminology  employed.     "Valuation"  seems  to 


FIXING   VALUE    OF    RAILROADS.  199 

relate  to  "value,"  and  a  "railway  valuation"  would  seem 
to  be  a  process  of  ascertaining  "railway  value."  Value, 
however,  is  a  ratio  in  exchange;  that  is  to  say,  in  com- 
merce. It  is  the  relation  which  the  law  of  supply  and 
demand  has,  for  the  time  being,  established  between  one 
commodity  and  another.  Value,  then,  is  an  incident  of 
commerce,  and  cannot  exist  without  it,  and  to  qualify 
the  term  "value"  by  the  word  "commercial"  is  super- 
fluous, for  all  value  must  be  commercial.  When  it  is 
proposed,  therefore,  to  undertake  something  which  is 
not  to  be  a  "commercial  valuation,"  it  is  plain  that  the 
thing  to  be  ascertained,  whatever  it  may  be,  cannot  be 
"value." 

Through  laying  undue  stress  upon  the  present  value 
of  material  in  place,  much  confusion  has  arisen  regard- 
ing the  elements  entering  into  value.  This  is  caused 
largely  by  using  the  term  "phj^sical  valuation"  instead 
of  "present  cost  of  reproduction."  This  confusion  has 
become  so  great  that  many  regard  the  present  value 
of  material  in  place  as  constituting  the  only  element 
in  such  value.  Little  attention  has  been  given  to  value 
derived  from  use.  It  is  unfortunate  that  so  well-known 
a  phrase  as  "cost  of  reproduction"  should  give  place  to 
one  which  is  little  understood  and  has  already  proved 
misleading. 

Views  of  Federal  Expert. 

Census  Bulletin  No.  21  gave  a  commercial  valuation 
of  railway  operated  property  in  the  U.  S.  a  few  years 
ago.  In  the  introduction,  Professor  Henry  C.  Adams, 
Statistician  of  the  Interstate  Commerce  Commission, 
stated  that  it  was  based  on  the  two  fundamental  consid- 


200  FIXING   VALUE    OF   RAILROADS. 

erations  by  which  the  market  is  influenced  when  prop- 
erty is  bought  or  sold,  namely,  the  expectation  of  in- 
come arising  from  its  use  and  its  strategic  significance. 
Subsequently  Professor  Adams  quoted  the  conclusions 
he  had  expressed  in  Census  Bulletin  No.  21,  and  urged 
an  "inventory  valuation,"  which  he  also  called  a  "physi- 
cal valuation." 

That  the  Commission  recognized  a  distinction  between 
what  has  been  erroneously  termed  "physical  valuation" 
and  what  the  courts  have  determined  to  be  '*fair  value," 
is  clearly  indicated  in  their  correspondence  later  with 
the  Committee  on  Interstate  Commerce  of  the  United 
States  Senate.  A  bill  was  then  pending  before  the 
Committee  directing  the  Commission  to  ascertain  the 
"fair  value"  of  railway  property.  They  objected  to 
the  use  of  the  term  "fair  value"  and  asked  to  have  sub- 
stituted a  direction  providing  only  for  "cost  of  repro- 
duction." 

Opinion  of  Interstate  Commerce  Commission. 

In  its  second  annual  report  (1888)  the  Interstate 
Commerce  Commission  said : 

The  present  value  of  a  railroad  property  is  neces- 
sarily very  largely  matter  of  opinion  only;  it  depends 
upon  a  vast  number  of  contingencies  and  uncertainties, 
a  road  apparently  of  great  value  today  may  soon  be- 
come worthless  by  the  opening  of  a  competing  line 
having  superior  advantages,  or  by  the  competitive  strug- 
gles of  other  lines  which  operate  to  reduce  the  income 
of  all;  the  value  of  a  railroad  largely  results  from  the 
personal  characteristics  of  its  officials;  the  policy  pur- 
sued by  its  directors,  whether  conservative  and  economi- 
cal or  aggressive  and  daring,  is  a  great  factor  in  the 
determination  of  the  current  value  of  the  property;  a 


FIXING    VALUE    OF    RAILROADS.  201 

railroad  property  is  not  necessarily  worth  what  it 
would  cost  to  replace  it,  and,  on  the  other  hand,  it  may 
be  worth  very  much  more  than  that.  (Page  64.) 
thus  admitting  the  existence  of  many  elements  other 
than  "cost  of  reproduction"  that  enter  into  the  "fair 
value"  of  a  railway  property. 

In  the  case  of  Smyth  v.  Ames,  169  U.  S.  466,  the 
Supreme  Court,  while  enumerating  a  number  of  items 
entering  into  the  valuation  of  a  railway,  said : 

We  do  not  say  that  there  may  not  be  other  matters 
to  be  regarded  in  estimating  the  value  of  the  property. 

In  the  case  of  the  Chicago,  etc.,  R.  Co.  v.  Minnesota 
(134  U.  S.,  418),  the  Supreme  Court  emphasized  the 
necessity  of  treating  the  railway  company  and  the 
shipper  with  equal  fairness. 

Sweeping  Decision  by  the  Federal  Courts. 

In  the  case  of  Metropolitan  Trust  Company  v.  Hous- 
ton &  Texas  Central  Railway  (being  an  appeal  from 
rates  established  by  the  Commission  based  on  "the  esti- 
mated cost  of  reproduction  of  the  road"),  the  court 
ruled  that  the  Commission  had  under-estimated  the 
value  of  the  property,  having  made  no  allowance  for  its 
favorable  location,  and  that: 

In  view  of  the  advance  in  prosperity  of  the  country 
through  which  it  runs,  and  the  increment  to  its  value 
due  to  the  settling,  seasoning  and  permanent  estabHsh- 
ment  of  the  railways,  and  to  the  estabhshed  business 
and  the  good  will  connected  with  its  business,  which 
has  been  established  through  a  long  series  of  years, 
and  all  of  which  ought  reasonably  to  be  considered  in 
fixing  the  value  of  the  property  and  the  capitalization 
upon  which  at  least  it  is  entitled  to  earn,  and  should 
pay,  some  returns  by  way  of  interest  or  dividends 


202  FIXING    VALUE    OF    RAILROADS. 

In  countries  conditioned  as  Texas  has  been  and  is, 
such  a  railroad  property  and  business  cannot  be  repro- 
duced, except  substantially  in  the  same  manner  in  which 
this  has  been  produced,  that  is,  by  a  judicious  selection 
of  location,  by  small  beginnings,  and  gradual  advance 
through  a  number  of  years,  more  or  less,  of  unproduc- 
tive growth.  The  particular  location  of  this  road,  of 
course,  cannot  be  reproduced,  and  it  cannot  be  appro- 
priated by  another  private  or  quasi  public  corporation 
carrier  by  the  exercise  of  the  State's  power  of  eminent 
domain.  And  even  if  the  State  should  proceed  to  ex- 
propriate this  property  for  the  purpose  of  taking  the 
same  to  itself  for  public  use,  the  location  of  this  road 
cannot  be  appropriated  any  more  than  any  other  prop- 
erty right  of  a  natural  person  or  of  a  corporation  can 
be  appropriated  without  just  compensation.  It  is,  there- 
fore, not  only  impracticable,  but  impossible,  to  repro- 
duce this  road,  in  any  just  sense,  or  according  to  any 
fair  definition  of  those  terms.  And  a  system  of  rates 
and  charges  that  looks  to  a  valuation  fixed  on  so  narrow 
a  basis  as  that  shown  to  have  been  adopted  by  the  Com- 
mission, and  so  fixed  as  to  return  only  a  fair  profit  upon 
that  valuation,  and  which  permits  no  account  for  better- 
ments made  necessary  by  the  growth  of  trade,  seems  to 
me  to  come  clearly  within  the  provision  of  the  Four- 
teenth Amendment  to  the  Constitution  of  the  United 
States,  which  forbids  that  a  State  shall  deprive  any 
person  of  property  without  due  process  of  law.  •  .  . 
(90Fed.,  683,  688,  689.) 

Thus  the  court  not  only  clearly  set  forth  that  the 
estimated  cost  of  reproduction  of  a  road  is  inadequate 
as  a  basis  of  railway  valuation,  but  itself  suggested  some 
of  the  other  elements  entering  into  such  valuation. 

As  Defined  by  Taft. 

In  Judge  Taft's  letter  accepting  the  nomination  for 
the  Presidency,  he  said : 


FIXING   VALUE    OF    RAILROADS.  203 

It  is  clear  that  the  physical  value  of  the  railroad  and 
its  plant  is  an  element  to  be  given  weight  in  determining 
its  full  value;  but  the  value  of  the  railroad  as  a  going 
concern,  including  its  good  will,  due  to  efficiency  of  ser- 
vice ,and  many  other  circumstances,  may  be  much 
greater  than  the  value  of  its  tangible  property,  and  it  is 
the  former  that  measures  the  investment  on  which  a  fair 
profit  must  be  allowed.  Then,  too,  the  question  what 
is  a  fair  profit  is  one  involving  not  only  the  rate  of  in- 
terest usually  earned  on  normally  safe  investments,  but 
also  a  sufficient  allowance  to  make  up  for  the  risk  of 
loss  both  of  capital  and  interest  in  the  original  outlay. 
The  question  of  rates  and  the  treatment  of  railroads  is 
one  that  has  two  sides.  The  shippers  are  certainly  en- 
titled to  reasonable  rates;  but  less  is  an  injustice  to  the 
carriers.  .  .  .  The  proper  conclusion  would  seem 
to  be  that  in  attempting  to  determine  whether  the  entire 
schedule  of  rates  of  a  railroad  is  excessive,  the  physical 
valuation  of  the  road  is  a  relevant  and  important  but 
not  necessarily  a  controlling  factor.     .     .     . 

Therefore,  it  would  seem  only  wise  and  prudent  to 
determine,  before  incurring  the  enormous  expense  in- 
cident to  ascertaining  the  cost  of  reproduction,  what 
relation,  if  any,  it  will  have  to  the  valuation  of  the  rail- 
way, that  is,  to  determine  how  such  cost  will  be  used  in 
arriving  at  value.  If  it  can  be  used,  then  consideration 
must  be  given  to  the  elements  that  enter  into  the  cost 
of  reproduction.  The  plan  now  most  generally  advo- 
cated is  that  which  has  been  followed  by  the  several 
States  that  have  undertaken  a  valuation  of  railways. 
Such  valuations  were  undertaken  originally  for  taxation 
purposes. 

Things  to  Be  Considered. 

There  are  differences  not  only  in  the  methods  followed 
by  the  several  States^  but  there  are  many  items  whicfa^ 


204  FIXING   VALUE    OF    RAILROADS. 

as  yet,  have  not  entered  into  the  valuation  by  any  of  the 
States  and  which  should  receive  proper  consideration. 
Among  the  items  that  have  been  ignored  or  inadequately 
treated  are: 

1 — Cost  of  Surveys. 

An  expenditure  of  $250,000  for  surveys  m  securing  a 
low-grade  line  through  the  Allegheny  or  Rocky  Moun- 
tains may  save  from  five  million  to  twenty-five  million 
dollars  in  the  ultimate  cost  of  a  reasonably  low-grade 
line.  This  necessitates  surveying  many  routes,  only  one 
of  which  will  be  used,  yet  all  must  enter  into  the  original 
cost. 

2 — Rate  of  Interest  During  Construction. 

The  allowance  of  four  per  cent,  is  much  below  the 
ability  of  any  new  railway  undertaking  to  secure  capital. 
This  rate  can  only  be  hoped  for  where  new  construction 
is  undertaken  by  an  existing  line  whose  credit  enables 
it  to  secure  money  at  such  a  low  rate. 

3 — ^Discount  on  Securities  Sold. 

Discount  is  a  partial  capitalization  of  commercial  risk 
incurred,  and  it  increases  or  decreases  in  proportion  to 
the  probable  earning  power.  This  practice  is  justified 
by  long  commercial  usage,  and  has  had  judicial  sanction. 
The  only  question  is  whether  discount  shall  be  cap- 
italized and  a  reasonable  return  thereon  allowed,  or 
whether,  during  the  time  the  securities  are  outstanding, 
the  amount  shall  be  charged  proportionately  each  year 
against  income.  Taking,  for  example,  $20,000,000  five 
per  cent,  bonds,  maturing  in  fifteen  years,  selling  at 
ninety,  this  would  result  in  either: 


FIXING   VALUE   OF   RAILROADS.  205 

(a)  Adding  to  capital  account,  the  annual  interest 
charge  may  continue  indefinitely  to  be  5  per  cent,  on 
$20,000,000,  or $1,000,000.00 

or 

(b)  Deducting  this  discount  from  income  account,  pro 
rata,  during  the  fifteen  years,  the  annual  charge  would  be : 

Annual  interest  charge  (5  per  cent.) $1,000,000.00 

Annual  amount  set  aside  for  fifteen  years 
to  overcome  discount  (not  compounded) 133,333.33 

Total  annual  charge  during  each  of  the  fifteen  years. .  .$1,133,333.33 

The  second  plan  reduces  the  abihty  to  pay  fair  wages, 
to  pay  a  fair  return  to  capital  or  to  lower  rates  during 
the  twenty  years. 

Which  plan  is  likely  to  secure  the  lower  charge  for 
services  rendered?  Which  is  the  more  Ukely  to  attract 
efficient  labor  or  capital?  If  the  sinking  fund  be  not 
earned,  can  the  deduction  be  made? 

4 — Cost  of  Material. 

This  must  include  the  increased  cost  of  placing  mate- 
rial on  the  ground  without  railway  facihties  for  trans- 
portation. It  is  a  serious  error  to  use  a  uniform  price 
list  for  all  materials.  The  source  of  supply  must  be 
considered. 

5 — Cost  of  Labor. 

Labor  in  construction  work  is  paid  a  much  higher 
rate  than  other  labor  in  the  same  community,  owing  to 
the  temporary  character  of  the  service,  and  to  the  lim- 
ited supply  not  meeting  the  increased  demand  produced 
by  such  extensive  temporary  work.  Labor  must  be 
brought  in  from  large  labor  centers.  Boarding  accom- 
modations must  be  established  and  train  service  installed 
to  transport  men  between  their  places  of  residence  and 
their  places  of  work. 


206  FIXING   VALUE    OF   RAILROADS. 

6 — ^Excavation  and  Embankments. 

No  uniform  price  of  earth  work  can  be  used.  It 
ignores  the  varying  character  of  the  soil  and  length  of 
haul. 

7 — Contingencies  and  Contractor's  Profit. 

The  ordinary  allowance  of  5  per  cent,  is  too  small. 
Usually  the  contractor  allows  not  less  than  10  per  cent, 
profit  for  himself,  in  addition  to  an  allowance  for  con- 
tingencies, and,  then,  his  loss  in  one  undertaking  may 
wipe  out  his  entire  capital.  For  this  reason  some  con- 
tracting firms  organize  a  subsidiary  corporation  for 
each  important  piece  of  construction,  thus  limiting  their 
liability.  Banks,  recognizing  the  great  risk  involved 
in  contracting,  are  extremely  careful  in  loaning  money 
to  such  undertakings.  Not  only  must  the  item  of  con- 
tingencies, therefore,  be  sufficiently  large  to  guarantee 
the  contractor  against  loss,  but  there  must  be  some  rea- 
sonable hope  of  profit  for  himself. 

8 — Effect  of  Machinery  on  Cost. 

There  have  been  many  improvements  in  machinery 
and  other  appliances,  which  tend  to  reduce  the  cost  of 
construction,  since  most  of  the  railways  were  built ;  for 
example,  rail-laying  machines. 

9 — Carrying  Charges. 

Interest  on  investment  and  depreciation,  if  any,  of 
plant  prior  to  time  it  is  placed  on  a  self-sustaining  basis. 
Texas  makes  this  allowance  in  determining  the  cost  price 
for  the  purpose  of  controlling  the  issue  of  capital  securi- 
ties. The  Wisconsin  Railroad  Commission  has  admit- 
fpA  the  right  of  the  investor  to  capitalize  such  interest 
and  depreciation. 


FIXING   VALUE   OF   RAILROADS.  207 

10 — Impact  and  Adaptation. 

Although  other  States  have  not  made  this  allowance, 
Minnesota  has  done  so  in  its  valuation  for  rate-making 
purposes. 

11— Special  Conditions  Affecting  Cost. 

Additions  and  betterments  made  under  traffic  (and 
which  were  made  for  the  purpose  of  increasing  the 
capacity  of  the  line)  necessarily  increases  the  cost  of 
the  work. 

12— The  Cost  of  Progress. 

Railways,  in  their  anxiety  to  render  the  most  satis- 
factory and  economical  service,  anticipate  the  future 
and  substitute  better  facilities  and  better  equipment 
before  the  old  facilities  and  equipment  actually  require 
renewal  or  have  become  obsolete ;  also  before  the  earn- 
ings from  traffic  would  permit  their  writing  off  of  the 
earlier  appliances. 

The  following  statement  by  the  engineer  who  made 
the  railroad  appraisal  in  Minnesota  is  of  especial  inter- 
est at  this  point: 

It  is  entirely  tenable  that  the  value  of  an  economically 
constructed,  judiciously  financed  and  efficiently  man- 
aged railway  property,  or  the  contra  thereof,  is  not 
measured  by  its  cost,  and,  for  the  instant,  it  seems  neces- 
sary to  recur  to  the  elementary  that  cost  and  value  are 
not  synonymous  and  that  the  determination  of  the  pres- 
ent value  of  the  physical  properties,  using  reproduction 
cost  as  a  basis,  bears  no  relation  to  value  in  the  sense 
of  utility,  or  as  an  investment. —  (Page  31,  Supplement 
to  Annual  Report  of  R.  R.  and  Warehouse  Commis- 
sion, year  ended  Nov.  30,  1908.) 


208  FIXING   VALUE   OF   RAILROADS. 

Problem  of  Relative  Values. 

What  is  the  relative  value  of  the  physical  property 
of  a  new  railway  and  that  of  a  railway  say  twenty-five 
years  old,  each  having  the  same  net  returns  from  traffic, 
the  one  being  a  duplicate  of  the  other?  On  this  sub- 
ject Mr.  W.  H.  Williams,  third  vice-president  of  the 
Delaware  &  Hudson  Company,  says:  "The  right  of 
way  value  would  necessarily  be  the  same,  but  the  re- 
placement value  of  material  and  equipment  on  the  older 
railway  would  be  only  fifty  per  cent,  of  that  of  the  new 
railway,  plus  such  salvage  value  as  material  may  have 
when  retired  from  service.  Assuming  that,  taking  into 
consideration  the  changes  in  cost  of  labor  and  material 
entering  into  the  construction,  and  the  reduction  in  pres- 
ent market  value  of  material  on  the  older  road  due  to 
wear  and  tear,  the  older  road  is  valued  at  only  ninety 
per  cent,  of  that  of  the  new  railway,  is  the  older  railway 
to  receive  on  its  return  from  traffic  only  ninety  per  cent, 
of  the  return  allowed  to  the  new  railway?'* 

Hard  to  Get  Reliable  Estimates. 

The  cost  of  reproduction  is  a  matter  of  individual 
opinion.  No  engineer  in  estimating  on  the  several  im- 
portant items  of  construction  work  for  the  year  will 
come  within  ten  per  cent,  of  the  total  aggregate  cost. 
Many  of  the  more  important  items  are  frequently 
underestimated  from  twenty-five  to  fifty  per  cent.  If 
experienced  engineers,  knowing  the  local  conditions, 
cannot  estimate  the  exact  cost,  how  can  those  without 
special  knowledge  be  expected  to  do  so?  A  very  good 
illustration  of  this  may  be  had  by  contrasting  the  orig- 
inal estimates  with  the  ultimate  cost  of  postoffices  and 


FIXING   VALUE   OF   KAILROADS.  209 

other  public  buildings.  An  especially  good  illustration, 
and  one  known  to  all  readers  of  the  daily  press,  is  that 
of  the  Panama  Canal.  The  original  estimate  of  the  cost 
of  engineering  and  construction  work  was  $139,705,200, 
but  a  subsequent  estimate  was  $297,766,000  (page  18, 
President's  message  to  61st  Congress) ,  and  it  is  prob- 
able this  cost  will  be  greatly  exceeded.  In  the  case  of 
the  Panama  Canal,  large  expenditures  have  been  made 
for  engineering  in  the  selection  of  a  route  and  to  deter- 
mine whether  a  water  level  or  lock  canal  was  the  more 
desirable.  These  expenditures  should  be  added  to  the 
cost,  now  (1916)  figured  at  $375,000,000. 

Policy  of  Railway  Managers. 

The  policy  of  railway  managements  has  been  to  make 
additions  and  betterments  when  the  anticipated  return 
was  sufficient  to  pay  the  increased  carrying  charges, 
even  if  such  return  was  not  likely  to  be  sufficient  imme- 
diately to  reimburse  the  stockholders  for  the  old  prop- 
erty withdrawn  from  service,  the  cost  of  which  would 
not  be  reflected  by  any  inventory  valuation.  Nor  would 
that  portion  of  the  capital  securities  issued  for  material, 
have  its  equivalent  in  an  inventory  valuation,  which  in- 
cluded the  material  at  less  than  its  cost  price;  that  is, 
where  an  appraisal  of  property  is  taken  before  the 
property  is  placed  on  a  self-sustaining  basis — a  differ- 
ence which  can  properly  be  regarded  as  part  of  the  cost 
of  securing  a  going  concern. 

There  are  doubtless  other  elements  affecting  the  rela- 
tion between  par  value  of  securities  outstanding  and  the 
"cost  of  reproduction."  All  of  them  should  receive  full 
consideration. 

I.B.L.  Vol.  8—14 


210  FIXING   VALUE   OF   RAILROADS. 

Wide  Range  in  Valuation. 

Professor  Adams  valued  the  Michigan  Central  Rail- 
road twice,  two  years  apart,  and  in  the  latter  year 
increased  the  valuation  to  the  extent  of  twenty  million 
dollars  by  the  simple  device  of  a  change  of  one  per  cent, 
in  the  interest  rate  assumed.  Professor  Adams  valued 
the  franchises  at  $18,259,880,  while  another  economist 
of  equal  distinction — Professor  E.  R.  Johnson  of  the 
University  of  Pennsylvania,  and  a  former  Isthmian 
Canal  Commissioner — computed  the  value  of  the  same 
franchises  as  $2,327,000.  The  methods  used  were  iden- 
tical except  as  to  the  interest  rate  assumed  to  be  appli- 
cable. No  one  has  yet  suggested  that  the  owners  of  the 
property  would  be  justified  in  thus  attempting  to  fool 
either  themselves  or  the  public. 

Real  Office  of  Money. 

Money  is  only  a  medium  of  exchange.  The  investor 
is  not  interested  in  the  money  return  from  his  invest- 
ment, but  in  the  result  to  be  obtained  with  that  money, 
i.  e,,  in  its  purchasing  power.  With  wheat  at  fifty  cents 
per  bushel,  the  return  on  a  $1,000  five  per  cent,  bond, 
selling  at  par,  would  purchase  one  hundred  bushels, 
while  with  wheat  at  one  dollar  per  bushel,  it  would  only 
purchase  fifty  bushels.  With  the  cost  of  living  continu- 
ally advancing,  the  proposed  limiting  of  income  from 
investments  in  railroads  must  necessarily  result  in  in- 
creased burdens  upon  those  dependent  entirely  upon 
such  income  for  support.  It  must  make  new  invest- 
ment in  these  securities  unattractive  so  long  as  capital 
in  other  branches  of  commerce  is  permitted  greater 
returns  with  equal  or  less  risk. 


FIXING   VALUE    OF    RAILROADS.  211 

The  real  situation  now  confronting  the  country  was 
set  forth  in  the  reports  of  the  Interstate  Commerce 
Commission  written  several  years  ago,  in  which  they 
called  attention  to  the  fact  "that  the  facihties  of  the  car- 
riers have  not  kept  pace  with  the  commercial  growth  of 
the  country." 

Railways  Favor  Fair  Valuation. 

It  should  not  be  inferred  that  the  railways  object  to 
having  a  valuation  placed  upon  their  properties.  In 
effect  such  valuations  are  daily  attempted  with  greater 
or  less  success  by  subscribers  to  new  issues  of  securities 
and  even  by  those  who  invest  largely  in  securities  here- 
tofore issued.  There  is,  however,  serious  objection  to  an 
incomplete  and  misleading  valuation  bearing  the  stamp 
and  carrying  the  weight  of  governmental  sanction, 
which  can  be  of  no  practical  advantage  to  the  govern- 
ment, the  public,  or  the  railways,  but  may  easily  injure 
the  pubh'c  and  the  railways  by  disturbing  the  confi- 
dence of  the  former  and  hampering  the  activities  of  the 
latter. 


AVhen,  on  March  1, 1918,  the  President  of  the  United 
States  signed  a  bill  directing  the  Interstate  Commerce 
Commission  to  make  a  "Valuation  of  the  Railways," 
the  end  which  it  was  intended  to  serve  was  not  specified 
in  the  bill.  There  was  a  feeling  on  the  part  of  many, 
however,  that  the  railways  are  over-capitalized — and 
that  they  endeavor  to  keep  their  rates  up  to  a  level  that 
will  produce  revenue  sufficient  to  pay  a  return  on  the 
excess  of  capitalization. 


"Whatever  affects  the  transportation  facihties  of  the 
Central  West  touches  its  economic  hf e  at  the  very  cen- 
ter."— The  Government  Report  on  Isthmian  Canal, 


"The  question  of  transportation  is  the  most  important 
one  before  the  civihzed  world.  The  nation  which  solves 
it  quickest  is  bound  to  win  in  the  race  for  commercial 
supremacy." — Hon,  J,  E,  Ransdell,  Member  of  House 
Committee  on  Rivers  and  Harbors. 


INTERSTATE 
COMMERCE 


"If  any  of  the  employes  of  our  railroads  want  to  try 
the  experiment  of  government  ownership  and  operation, 
let  them  enlist  for  three  years  in  the  Regular  Army. 
Their  experience  in  that  service  will  not  differ  materially 
from  their  experience  in  any  subordinate  position  on  a 
government  owned  and  operated  railroad." — Peter  M. 
Arthur  (now  dead) ,  former  Grand  Chief  of  the  Broth- 
erhood of  Locomotive  Engineers. 


CHAPTER  XVII. 

INTERSTATE  COMMERCE  ACT. 

Following  is  the  complete  text  of  the  act  creating  the 
Inter  State  Commerce  Commission  and  defining  the 
conditions  upon  which  corporations  may  engage  in  the 
transportation  of  passengers,  goods,  etc.,  between  the 
various  States: 

Be  it  enacted  by  the  Senate  and  House  of  Representa- 
tives of  the  United  States  of  America  in  Congress 
assembled.  That  the  provisions  of  tliis  act  shall  ap- 
ply to  any  common  carrier  or  carriers  engaged  in  the 
transportation  of  passengers  or  property  wholly  by  rail- 
road, or  partly  by  railroad  and  partly  by  water  when 
both  are  used,  under  a  common  control,  management, 
or  arrangement,  for  a  continuous  carriage  or  shipment, 
from  one  State  or  Territory  of  the  United  States,  or 
the  District  of  Columbia,  to  any  other  State  or  Terri- 
tory of  the  United  States  or  the  District  of  Columbia, 
or  from  any  place  in  the  United  States  to  an  adjacent 
foreign  country,  or  from  any  place  in  the  United  States 
through  a  foreign  country  to  any  other  place  in  the 
United  States,  and  also  to  the  transportation  in  like 
manner  of  property  shipped  from  any  place  in  the 
United  States  to  a  foreign  country  and  carried  from 
such  place  to  a  port  of  transshipment,  or  shipped  from  a 
foreign  country  to  any  place  in  the  United  States  and 
carried  to  such  place  from  a  port  of  entry  either  in  the 
United  States  or  an  adjacent  foreign  country: 

215 


216  INTERSTATE    COMMERCE    ACT. 

Provided,  however.  That  the  provisions  of  this  act 
shall  not  apply  to  the  transportation  of  passengers  or 
property,  or  to  the  receiving,  delivering,  storage,  or 
handling  of  property,  wholly  within  one  State,  and  not 
shipped  io  or  from  a  foreign  country,  from  or  to  any 
State  or  Territory  as  aforesaid. 

The  term  "railroad"  as  used  in  this  act  shall  include 
all  bridges  and  ferries  used  or  operated  in  connection 
with  any  railroad,  and  also  all  the  road  in  use  by  any 
corporation  operating  a  railroad,  whether  owned  or 
operated  under  a  contract,  agreement,  or  lease ;  and  the 
term  "transportation"  shall  include  all  instrumentalities 
of  shipment  or  carriage. 

Charges  Must  Be  Reasonable. 

Sec.  1. — All  charges  made  for  any  service  rendered 
or  to  be  rendered  in  the  transportation  of  passengers  or 
property  as  aforesaid,  or  in  connection  therewith,  or  for 
the  receiving,  delivering,  storage,  or  handling  of  such 
property,  shall  be  reasonable  and  just;  and  every  un- 
just and  unreasonable  charge  for  such  service  is  pro- 
hibited and  declared  to  be  unlawful. 

Sec.  2. — That  if  any  common  carrier  subject  to  the 
provisions  of  this  act  shall,  directly  or  indirectly,  by  any 
special  rate,  rebate,  drawback,  or  other  device,  charge, 
demand,  collect,  or  receive  from  any  person  or  persons 
a  greater  or  less  compensation  for  any  service  rendered, 
or  to  be  rendered,  in  the  transportation  of  passengers  or 
property,  subject  to  the  provisions  of  this  act,  than  it 
charges,  demands,  collects,  or  receives  from  any  other 
person  or  persons  for  doing  for  him  or  them  a  like  and 
contemporaneous  service  in  the  transportation  of  a  like 


INTERSTATE    COMMERCE    ACT.  217 

kind  of  traffic  under  substantially  similar  circumstances 
and  conditions,  such  common  carrier  shall  be  deemed 
guilty  of  unjust  discrimination,  which  is  hereby  prohib- 
ited and  declared  to  be  unlawful. 

Sec.  3. — That  it  shall  be  unlawful  for  any  conmion 
carrier  subject  to  the  provisions  of  this  act  to  make 
or  give  any  undue  or  unreasonable  preference  or  ad- 
vantage to  any  particular  person,  company,  firm,  cor- 
poration, or  locality,  or  any  particular  description  of 
traffic,  in  any  respect  whatsoever,  or  to  subject  any  par- 
ticular person,  company,  firm,  corporation,  or  locahty, 
or  any  particular  description  of  traffic,  to  any  undue 
or  unreasonable  prejudice  or  disadvantage  in  any  re- 
spect whatsoever. 

Every  common  carrier  subject  to  the  provisions  of 
this  act  shall,  according  to  their  respective  powers,  af- 
ford all  reasonable,  proper,  and  equal  facihties  for  the 
interchange  of  traffic  between  their  respective  lines,  and 
for  the  receiving,  forwarding,  and  delivering  of  passen- 
gers and  property  to  and  from  their  several  lines  and 
those  connecting  therewith,  and  shall  not  discriminate 
in  their  rates  and  charges  between  such  connecting  lines ; 
but  this  shall  not  be  construed  as  requiring  any  such 
common  carrier  to  give  the  use  of  its  tracks  or  terminal 
facihties  to  another  carrier  engaged  in  hke  business. 

Long  and  Short  Haul. 

Sec.  4. — That  it  shall  be  unlawful  for  any  common 
carrier  subject  to  the  provisions  of  this  act  to  charge  or 
receive  any  greater  compensation  in  the  aggregate  for 
the  transportation  of  passengers  or  of  hke  kind  of  prop- 
erty, under  substantially  similar  circumstances  and  con- 


218  INTERSTATE    COMMERCE    ACT. 

ditions,  for  a  shorter  than  for  a  longer  distance  over  the 
same  line,  in  the  same  direction,  the  shorter  being  in- 
cluded within  the  longer  distance;  but  this  shall  not  be 
construed  as  authorizing  any  common  carrier  within  the 
terms  of  this  act  to  charge  and  receive  as  great  compen- 
sation for  a  shorter  as  for  a  longer  distance : 

Provided,  however.  That  upon  apphcation  to  the 
Commission  appointed  under  the  provisions  of  this  act, 
such  common  carrier  may,  in  special  cases,  after  investi- 
gation by  the  Commission,  be  authorized  to  charge  less 
for  longer  than  for  shorter  distances  for  the  transporta- 
tion of  passengers  or  property ;  and  the  Commission  may 
from  time  to  time  prescribe  the  extent  to  which  such 
designated  common  carrier  may  be  relieved  from  the 
operation  of  this  section  of  this  act. 

Sec.  5. — That  it  shall  be  unlawful  for  any  common 
carrier,  subject  to  the  provisions  of  this  act  to  enter 
into  any  contract,  agreement,  or  combination  with  any 
other  common  carrier  or  carriers  for  the  pooling  of 
freights  of  different  and  competing  railroads,  or  to  di- 
vide between  them  the  aggregate  or  net  proceeds  of  the 
earnings  of  such  railroads,  or  any  portion  thereof; 
and  in  any  case  of  an  agrement  for  the  pooling  of 
freights  as  aforesaid,  each  day  of  its  continuance  shall 
be  deemed  a  separate  offense. 

Publication  of  Schedules. 

Sec.  6. — (As  amended  March  2, 1889,) — That  every 
common  carrier  subject  to  the  provisions  of  this  act 
shall  print  and  keep  open  to  public  inspection  schedules 
showing  the  rates  and  fares  and  charges  for  the  trans- 
portation of  passengers  and  property  which  any  such 


INTERSTATE    COMMERCE    ACT.  219 

common  carrier  has  established,  and  which  are  in  force 
at  the  time  upon  its  route.  The  schedules  printed  as 
aforesaid  by  any  such  common  carrier  shall  plainly  state 
the  places  upon  its  railroad  between  which  property  and 
passengers  will  be  carried,  and  shall  contain  the  classifi- 
cation of  freight  in  force,  and  shall  also  state  separately 
the  terminal  charges  and  any  rules  or  regulations  which 
in  any  wise  change,  affect,  or  determine  any  part  or  the 
aggregate  of  such  aforesaid  rates  and  fares  and 
charges.  Such  schedules  shall  be  plainly  printed  in  large 
type,  and  copies  for  the  use  of  the  public  shall  be  posted 
in  two  public  and  conspicuous  places,  in  every  depot, 
station,  or  office  of  such  carrier  where  passengers  or 
freight,  respectively,  are  received  for  transportation,  in 
such  form  that  they  shall  be  accessible  to  the  public  and 
can  be  conveniently  inspected. 

Any  common  carrier  subject  to  the  provisions  of  this 
act,  receiving  freight  in  the  United  States  to  be  carried 
through  a  foreign  country  to  any  place  in  the  United 
States  shall  also  in  like  manner  print  and  keep  open 
to  public  inspection,  at  every  depot  or  office  where  such 
freight  is  received  for  shipment,  schedules  showing  the 
through  rates  established  and  charged  by  such  common 
carrier  to  all  points  in  the  United  States  beyond  the 
foreign  country  to  which  it  accepts  freight  for  shipment ; 
and  any  freight  shipped  from  the  United  States  through 
a  foreign  country  into  the  United  States,  the  through 
rate  on  which  shall  not  have  been  made  public  as 
required  by  this  act,  shall,  before  it  is  admitted  into  the 
United  States  from  said  foreign  country,  be  subject  to 
customs  duties  as  if  said  freight  were  of  foreign  produc- 


220  INTERSTATE    COMMERCE    ACT. 

tion;  and  any  law  in  conflict  with  this  section  is  hereby 
repealed. 

No  advance  shall  be  made  in  the  rates,  fares  and 
charges  which  have  been  established  and  published  as 
aforesaid  by  any  common  carrier  in  compliance  with 
the  requirements  of  this  section,  except  after  ten  days' 
public  notice,  which  shall  plainly  state  the  changes  pro- 
posed to  be  made  in  the  schedule  then  in  force,  and  the 
time  when  the  increased  rates,  fares,  or  charges  will  go 
into  effect ;  and  the  proposed  changes  shall  be  sho^vn  by 
printing  new  schedules,  or  shall  be  plainly  indicated  up- 
on the  schedules  in  force  at  the  time  and  kept  open  to 
public  inspection.  Reductions  in  such  published  rates, 
fares,  or  charges  shall  only  be  made  after  three  days' 
previous  public  notice,  to  be  given  in  the  same  manner 
that  notice  of  an  advance  in  rates  must  be  given. 

And  when  any  such  common  carrier  shall  have  estab- 
lished and  published  its  rates,  fares  and  charges  in  com- 
pliance with  the  provisions  of  this  section,  it  shall  be 
unlawful  for  such  common  carrier  to  charge,  demand, 
collect,  or  receive  from  any  person  or  persons  a  greater 
or  less  compensation  for  the  transportation  of  passen- 
gers or  property,  or  for  any  services  in  connection  there- 
with, than  is  specified  in  such  pubhshed  schedule  of 
rates,  fares,  and  charges  as  may  at  the  time  be  in  force. 

Changes  Must  be  Announced. 

Every  common  carrier  subject  to  the  provisions  of 
this  act  shall  file  with  the  Commission  hereinafter  pro- 
vided for  copies  of  its  schedules  of  rates,  fares,  and 
charges  which  have  been  established  and  published  in 
compliance  with  the  requirements  of  this  section,  and 


INTERSTATE    COMMERCE    ACT.  221 

shall  promptly  notify  said  Commission  of  all  changes 
made  in  the  same.  Every  such  common  carrier  shall  also 
file  with  said  Commission  copies  of  all  contracts,  agree 
ments,  or  arrangements  with  other  common  carriers  in 
relation  to  any  traffic  affected  by  the  provisions  of  this 
act  to  which  it  may  be  a  party.  And  in  cases  where  pas- 
sengers and  freight  pass  over  continuous  lines  or  routes 
operated  by  more  than  one  common  carrier,  and  the 
several  common  carriers  operating  such  lines  or  routes 
establish  joint  tariffs  of  rates  or  fares  or  charges  for 
such  continuous  lines  or  routes,  copies  of  such  joint 
tariffs  shall  also,  in  like  manner,  be  filed  with  said  Com- 
mission. Such  joint  rates,  fares,  and  charges  on  such 
continuous  lines  so  filed  as  aforesaid  shall  be  made  pub- 
lic by  such  common  carriers  when  directed  by  said  Com- 
mission, in  so  far  as  may,  in  the  judgment  of  the  Com- 
mission, be  deemed  practicable;  and  said  Commission 
shall  from  time  to  time  prescribe  the  measure  of  pub- 
licity which  shall  be  given  to  such  rates,  fares,  and 
charges,  or  to  such  part  of  them  as  it  may  deem  it 
practicable  for  such  common  carriers  to  pubHsh,  and 
the  places  in  which  they  shall  be  published. 

No  advance  shall  be  made  in  joint  rates,  fares,  and 
charges,  shown  upon  joint  tariffs,  except  after  ten  days' 
notice  to  the  Conmiission,  which  shall  plainly  state  the 
changes  proposed  to  be  made  in  the  schedule  then  in 
force,  and  the  time  when  the  increased  rates,  fares,  or 
charges  will  go  into  effect.  No  reduction  shall  be  made 
in  joint  rates,  fares,  and  charges,  except  after  three 
days'  notice,  to  be  given  to  the  Commission  as  is  above 
provided  in  the  case  of  an  advance  of  joint  rates.  The 
Commission  may  make  pubhc  such  proposed  advances, 


222  INTERSTATE    COMMESCE    ACT. 

or  such  reductions,  in  such  manner  as  may,  in  its  judg- 
ment, be  deemed  practicable,  and  may  prescribe  from 
time  to  time  the  measure  of  publicity  which  common 
carriers  shall  give  to  advances  or  reductions  in  joint 
tariffs. 

Must  Adhere  to  Schedules. 

It  shall  be  unlawful  for  any  common  carrier,  party  to 
any  joint  tariff,  to  charge,  demand,  collect,  or  receive 
from  any  person  or  persons  a  greater  or  less  compensa- 
tion for  the  transportation  of  persons  or  property,  or 
for  any  services  in  connection  therewith,  between  any 
points  as  to  which  a  joint  rate,  fare,  or  charge  is  named 
thereon  than  is  specified  in  the  schedule  filed  with  the 
Commission  in  force  at  the  time. 

The  Commission  may  determine  and  prescribe  the 
form  in  which  the  schedules  required  by  this  section  to 
be  kept  open  to  public  inspection  shall  be  prepared  and 
arranged,  and  may  change  the  form  from  time  to  time 
as  shall  be  found  expedient. 

If  any  such  common  carrier  shall  neglect  or  refuse  to 
file  or  publish  its  schedules  or  tariffs  of  rates,  fares,  and 
charges  as  provided  in  this  section,  or  any  part  of  the 
same,  such  common  carrier  shall,  in  addition  to  other 
penalties  herein  prescribed,  be  subject  to  a  writ  of  man- 
damus, to  be  issued  by  any  circuit  court  of  the  United 
States  in  the  judicial  district  wherein  the  principal  office 
of  said  common  carrier  is  situated,  or  wherein  such  of- 
fense may  be  committed,  and  if  such  common  carrier  be 
a  foreign  corporation  in  the  judicial  circuit  wherein  such 
common  carrier  accepts  traffic  and  has  an  agent  to  per- 
form such  service,  to  compel  compliance  with  the  afore- 


INTERSTATE    COMMERCE    ACT.  223 

said  provisions  of  this  section;  and  such  writ  shall  issue 
in  the  name  of  the  people  of  the  United  States,  at  the 
relation  of  the  Commissioners  appointed  under  the  pro- 
visions of  this  act ;  and  the  failure  to  comply  with  its  re- 
quirements shall  be  punishable  as  and  for  a  contempt; 
and  the  said  Commissioners,  as  complainants,  may  also 
apply,  in  any  such  circuit  court  of  the  United  States,  for 
a  writ  of  injunction  against  such  common  carrier,  to  re- 
strain such  common  carrier  from  receiving  or  transport- 
ing property  among  the  several  States  and  Territories 
of  the  United  States,  or  between  the  United  States  and 
adjacent  foreign  countries,  or  between  points  of  trans- 
shipment and  of  entry  and  the  several  States  and  Terri- 
tories of  the  United  States,  as  mentioned  in  the  first  sec- 
tion of  this  act,  until  such  common  carrier  shall  have 
complied  with  the  aforesaid  provisions  of  this  section 
of  this  act. 

Continuous  Shipment  Demanded. 

Sec.  7 — That  it  shall  be  unlawful  for  any  common 
carrier  subject  to  the  provisions  of  this  act  to  enter  into 
any  combination,  contract,  or  agreement,  expressed  or 
implied,  to  prevent,  by  change  of  time  schedule,  carriage 
in  diiferent  cars,  or  by  other  means  or  devices,  the  car- 
riage of  freights  from  being  continuous  from  the  place 
of  shipment  to  the  place  of  destination;  and  no  break 
of  bulk,  stoppage,  or  interruption  made  by  such  common 
carrier  shall  prevent  the  carriage  of  freights  from  being 
and  being  treated  as  one  continuous  carriage  from  the 
place  of  shipment  to  the  place  of  destination,  unless 
such  break,  stoppage,  or  interruption  was  made  in  good 
faith  for  some  necessary  purpose,  and  without  any  in- 


224  INTERSTATE    COMMERCE    ACT. 

tent  to  avoid  or  unnecessarily  interrupt  such  continuous 
carriage  or  to  evade  any  of  the  provisions  of  this  act. 

Carriers  Liable  for  Damages. 

Sec  8. — That  in  case  any  common  carrier  subject  to 
the  provisions  of  this  act  shall  do,  cause  to  be  done,  or 
permit  to  be  done  any  act,  matter,  or  thing  in  this  act 
prohibited  or  declared  to  be  unlawful,  or  shall  omit  to 
do  any  act,  matter,  or  thing  in  this  act  required  to  be 
done,  such  common  carrier  shall  be  liable  to  the  person 
or  persons  injured  thereby  for  the  full  amount  of  dam- 
ages sustained  in  consequence  of  any  such  violation  of 
the  provisions  of  this  act,  together  with  a  reasonable 
counsel  or  attorney's  fee,  to  be  fixed  by  the  court  in 
every  case  of  recovery,  which  attorney's  fee  shall  be 
taxed  and  collected  as  part  of  the  costs  in  the  case. 

Two  Courses  in  Damage  Actions. 

Sec.  9. — That  any  person  or  persons  claiming  to  be 
damaged  by  any  common  carrier  subject  to  the  provi- 
sions of  this  act  may  either  make  complaint  to  the  Com- 
mission as  hereinafter  provided  for,  or  may  bring  suit 
in  his  or  their  own  behalf  for  the  recovery  of  the  dam- 
ages for  which  such  common  carrier  may  be  liable  under 
the  provisions  of  this  act,  in  any  district  or  circuit  court 
of  the  United  States  of  competent  jurisdiction;  but  such 
person  or  persons  shall  not  have  the  right  to  pursue  both 
of  said  remedies,  and  must  in  each  case  elect  which  one 
of  the  two  methods  of  procedure  herein  provided  for  he 
or  they  will  adopt.  In  any  such  action  brought  for  the 
recovery  of  damages  the  court  before  which  the  same 
shall  be  pending  may  compel  any  director,  officer,  re- 


INTERSTATE    COMMERCE    ACT.  225 

ceiver,  trustee,  or  agent  of  the  corporation  or  company 
defendant  in  such  suit  to  attend,  appear,  and  testify  in 
such  case,  and  may  compel  the  production  of  the  books 
and  papers  of  such  corporation  or  company  party  to 
any  such  suit ;  the  claim  that  any  such  testimony  or  evi- 
dence may  tend  to  criminate  the  person  giving  such  evi- 
dence shall  not  excuse  such  witness  from  testifying,  but 
such  evidence  or  testimony  shall  not  be  used  against 
such  person  on  the  trial  of  any  criminal  proceeding. 

Pimishment  for  Offenders. 

Sec.  10. — (As  amended  March  2,  1899.) — That  any 
conunon  carrier  subject  to  the  provisions  of  this  act,  or 
whenever  such  common  carrier  is  a  corporation,  any  di- 
rector or  officer  thereof,  or  any  receiver,  trustee,  lessee, 
agent,  or  person,  acting  for  or  employed  by  such  cor- 
poration, who,  alone  or  with  any  other  corporation,  com- 
pany, person,  or  party,  shall  willfully  do  or  cause  to 
be  done,  or  shall  willingly  suffer  or  permit  to  be  done, 
any  act,  matter,  or  thing  in  this  act  prohibited  or  de- 
clared to  be  unlawful,  or  who  shall  aid  or  abet  therein, 
or  shall  willfully  omit  or  fail  to  do  any  act,  matter,  or 
thing  in  this  act  required  to  be  done,  or  shall  cause  or 
willingly  suffer  or  permit  any  act,  matter,  or  thing 
so  directed  or  required  by  this  act  to  be  done  not  to  be 
so  done,  or  shall  aid  or  abet  any  such  omission  or  failure, 
or  shall  be  guilty  of  any  infraction  of  this  act,  or  shall 
aid  or  abet  therein,  shall  be  deemed  guilty  of  a  misde- 
meanor, and  shall,  upon  conviction  thereof  in  any  dis- 
trict court  of  the  United  States  within  the  jurisdiction 
of  which  such  offense  was  committed,  be  subject  to  a 
fine  of  not  to  exceed  $5,000  for  each  offense:    Provided, 

I.B.I,.  Vol.  8—15 


226  INTERSTATE    COMMERCE    ACT. 

That  if  the  offense  for  which  any  person  shall  be  con- 
victed as  aforesaid  shall  be  an  unlawful  discrimination  in 
rates,  fares,  or  charges,  for  the  transportation  of  pas- 
sengers or  property,  such  person  shall,  in  addition  to  the 
fine  hereinbefore  provided  for,  be  liable  to  imprison- 
ment in  the  penitentiary  for  a  term  of  not  exceeding 
two  years,  or  both  such  fine  and  imprisonment,  in  the 
discretion  of  the  court. 

Any  common  carrier  subject  to  the  provisions  of  this 
act,  or,  whenever  such  common  carrier  is  a  corporation, 
any  officer  or  agent  thereof,  or  any  person  acting  for  or 
employed  by  such  corporation,  who,  by  means  of  false 
billing,  false  classification,  false  weighing,  or  false  re- 
port of  weight,  or  by  any  other  device  or  means,  shall 
knowingly  and  willfully  assist,  or  shall  willingly  suffer 
or  permit,  any  person  or  persons  to  obtain  transporta- 
tion for  property  at  less  than  the  regular  rates  then  es- 
tablished and  in  force  on  the  line  of  transportation  of 
such  common  carrier,  shall  be  deemed  guilty  of  a  misde- 
meanor, and  shall,  upon  conviction  thereof  in  any  court 
of  the  United  States  of  competent  jurisdiction  within 
the  district  in  which  such  offense  was  committed,  be  sub- 
ject to  a  fine  of  not  exceeding  $5,000,  or  imprisonment  in 
the  penitentiary  for  a  term  of  not  exceeding  two  years, 
or  both,  in  the  discretion  of  the  court,  for  each  offense. 

Shippers  Are  Also  Liable. 

Any  person  and  any  officer  or  agent  of  any  corpora- 
tion or  company  who  shall  deliver  property  for  trans- 
portation to  any  common  carrier,  subject  to  the  provi- 
sions of  this  act,  or  for  whom  as  consignor  or  consignee 
any  such  carrier  shall  transport  property,  who  shall 
knowingly  and  willfully,  by  false  billing,  false  classifica- 


Interstate  commerce  act.  227 

tion,  false  weighing,  false  representation  of  the  contents 
of  the  package,  or  false  report  of  weight,  or  by  any 
other  device  or  means,  whether  with  or  without  the 
consent  or  connivance  of  the  carrier,  its  agent  or  agents, 
obtain  transportation  for  such  property  at  less  than 
the  regular  rates  then  estabUshed  and  in  force  on  the 
hne  of  transportation,  shall  be  deemed  guilty  of  fraud, 
which  is  hereby  declared  to  be  a  misdemeanor,  and  shall, 
upon  conviction  thereof  in  any  court  of  the  United 
States  of  competent  jurisdiction  within  the  district  in 
which  such  offense  was  committed,  be  subject  for  each 
offense  to  a  fine  of  not  exceeding  $5,000  or  imprisonment 
in  the  penitentiary  for  a  term  of  not  exceeding  two 
years,  or  both,  in  the  discretion  of  the  court. 

Punishment  for  Bribers. 

If  any  such  person,  or  any  officer  or  agent  of  any  such 
corporation  or  company,  shall,  by  payment  of  money 
or  other  thing  of  value,  solicitation,  or  otherwise,  induce 
any  common  carrier  subject  to  the  provisions  of  this  act, 
or  any  of  its  officers  or  agents,  to  discriminate  im justly 
in  his,  its,  or  their  favor  as  against  any  other  consignor 
or  consignee  in  the  transportation  of  property,  or  shall 
aid  or  abet  any  common  carrier  in  any  such  unjust  dis- 
crimination, such  person  or  such  officer  or  agent  of  such 
corporation  or  company  shall  be  deemed  guilty  of  a 
misdemeanor,  and  shall,  upon  conviction  thereof  in  any 
court  of  the  United  States  of  competent  jurisdiction 
within  the  district  in  which  such  offense  was  committed, 
be  subject  to  a  fine  of  not  exceeding  $5,000,  or  impris- 
onment in  the  penitentiary  for  a  term  of  not  exceeding 
two  years,  or  both,  in  the  discretion  of  the  court,  for 


228  INTERSTATE    COMMERCE    ACT. 

each  offense ;  and  such  person,  corporation,  or  company 
shall  also,  together  with  said  common  carrier,  be  liable, 
jointly  or  severally,  in  an  action  on  the  case  to  be 
brought  by  any  consignor  or  consignee  discriminated 
against  in  any  court  of  the  United  States  of  competent 
jurisdiction  for  all  damages  caused  by  or  resulting  there- 
from. 

Creation  of  Commission. 

Sec.  11. — That  a  Commission  is  hereby  created  and 
estabhshed  to  be  known  as  the  Inter- State  Conmierce 
Commission,  which  shall  be  composed  of  five  Commis- 
sioners, who  shall  be  appointed  by  the  President,  by  and 
with  the  advice  and  consent  of  the  Senate.  The  Com- 
missioners first  appointed  under  this  act  shall  continue 
in  office  for  the  term  of  two,  three,  four,  five,  and  six 
years,  respectively,  from  the  first  day  of  January,  anno 
Domini  eighteen  hundred  and  eighty-seven,  the  term  of 
each  to  be  designated  by  the  President;  but  their  suc- 
cessors shall  be  appointed  for  terms  of  seven  years,  ex- 
cept that  any  person  chosen  to  fill  a  vacancy  shall  be 
appointed  only  for  the  unexpired  time  of  the  Commis- 
sioner whom  he  shall  succeed.  Any  Commissioner  may 
be  removed  by  the  President  for  inefficiency,  neglect  of 
duty,  or  malfeasance  in  office.  Not  more  than  three  of 
the  Commissioners  shall  be  appointed  from  the  same 
political  party.  No  person  in  the  employ  of  or  holding 
any  official  relation  to  any  common  carrier  subject  to 
the  provisions  of  this  act,  or  owning  stock  or  bonds  there- 
of, or  who  is  in  any  manner  pecuniarily  interested  there- 
in, shall  enter  upon  the  duties  of  or  hold  such  office. 
Said  Commissioners  shall  not  engage  in  any  other  busi- 


INTERSTATE    COMMERCE    ACT.  229 

ness,  vocation,  or  employment.  No  vacancy  in  the  Com- 
mission shall  impair  the  right  of  the  remaining  Commis- 
sioners to  exercise  all  the  powers  of  the  Commission. 

Authority  of  the  Commission. 

Sec  12. — (As  amended  March  2, 1889,  and  February 
10 y  1891.) — That  the  Commission  hereby  created  shall 
have  authority  to  inquire  into  the  management  of  the 
business  of  all  conmaon  carriers  subject  to  the  provisions 
of  this  act,  and  shall  keep  itself  informed  as  to  the  man- 
ner and  method  in  which  the  same  is  conducted,  and  shall 
have  the  right  to  obtain  from  such  common  carriers  full 
and  complete  information  necessary  to  enable  the  Com- 
mission to  perform  the  duties  and  carry  out  the  objects 
for  which  it  was  created ;  and  the  Commission  is  hereby 
authorized  and  required  to  execute  and  enforce  the  pro- 
visions of  this  act ;  and  upon  the  request  of  the  Commis- 
sion, it  shall  be  the  duty  of  any  district  attorney  of  the 
United  States  to  whom  the  Commission  may  apply  to 
institute  in  the  proper  court  and  to  prosecute  under  the 
direction  of  the  Attorney- General  of  the  United  States 
all  necesssary  proceedings  for  the  enforcement  of  the 
provisions  of  this  act  and  for  the  punishment  of  all  viola- 
tions thereof,  and  the  costs  and  expenses  of  such  prose- 
cution shall  be  paid  out  of  the  appropriation  for  the  ex- 
penses of  the  courts  of  the  United  States;  and  for  the 
purposes  of  this  act  the  Conmiission  shall  have  power  to 
require,  by  subpoena,  the  attendance  and  testimony  of 
witnesses  and  the  production  of  all  books,  papers,  tariffs, 
contracts,  agreements,  and  documents  relating  to  any 
matter  under  investigation. 


230  INTERSTATE    COMMERCE    ACT. 

Compulsory  Attendance  of  Witnesses. 

Such  attendance  of  witnesses,  and  the  production  of 
such  documentary  evidence,  may  be  required  from  any 
place  in  the  United  States,  at  any  designated  place  of 
hearing.  And  in  case  of  disobedience  to  a  subpoena  the 
Commission,  or  any  party  to  a  proceeding  before  the 
Commission,  may  invoke  the  aid  of  any  court  of  the 
United  States  in  requiring  the  attendance  and  testi- 
mony of  witnesses  and  the  production  of  books,  papers, 
and  docuuments  under  the  provisions  of  this  section. 

And  any  of  the  circuit  courts  of  the  United  States 
within  the  jurisdiction  of  which  such  inquiry  is  carried 
on  may,  in  case  of  contumacy  or  refusal  to  obey  a  sub- 
poena issued  to  any  common  carrier  subject  to  the  pro- 
visions of  this  act,  or  other  person,  issue  an  order  requir- 
ing such  common  carrier  or  other  person  to  appear  be- 
fore said  Conmiission  (and  produce  books  and  papers 
if  so  ordered)  and  give  evidence  touching  the  matter  in 
question ;  and  any  failure  to  obey  such  order  of  the  court 
may  be  punished  by  such  court  as  a  contempt  thereof. 
The  claim  that  any  such  testimony  or  evidence  may  tend 
to  criminate  the  person  giving  such  evidence  shall  not 
excuse  such  witness  from  testifying;  but  such  evidence 
or  testimony  shall  not  be  used  against  such  person  on 
the  trial  of  any  criminal  proceeding. 

Taking  of  Depositions. 

The  testimony  of  any  witness  may  be  taken,  at  the 
instance  of  a  party  in  any  proceeding  or  investigation 
pending  before  the  Commission,  by  deposition,  at  any 
time  after  a  cause  or  proceeding  is  at  issue  on  petition 
and  answer.    The  Commission  may  also  order  testimony 


INTERSTATE    COMMERCE    ACT.  231 

to  be  taken  by  deposition  in  any  proceeding  or  investiga- 
tion pending  before  it,  at  any  stage  of  such  proceeding  or 
investigation.  Such  depositions  may  be  taken  before 
any  judge  of  any  court  of  the  United  States,  or  any 
commissioner  of  a  circuit,  or  any  clerk  of  a  district  or 
circuit  court,  or  any  chancellor,  justice,  or  judge  of  a 
supreme  or  superior  court,  mayor  or  chief  magistrate  of 
a  city,  judge  of  a  county  court,  or  court  of  common  pleas 
of  any  of  the  United  States,  or  any  notary  public,  not 
being  of  counsel  or  attorney  to  either  of  the  parties,  not 
interested  in  the  event  of  the  proceeding  or  investigation. 
Reasonable  notice  must  first  be  given  in  writing  by  the 
party  or  his  attorney  proposing  to  take  such  deposition 
to  the  opposite  party  or  his  attorney  of  record,  as  either 
may  be  nearest,  which  notice  shall  state  the  name  of  the 
witness  and  the  time  and  place  of  the  taking  of  his  depo- 
sition. Any  person  may  be  compelled  to  appear  and  de- 
pose, and  to  produce  documentary  evidence,  in  the  same 
manner  as  witnesses  may  be  compelled  to  appear  and 
testify  and  produce  documentary  evidence  before  the 
Commission  as  hereinbefore  provided. 

Every  person  deposing  as  herein  provided  shall  be 
cautioned  and  sworn  (or  affirm,  if  he  so  request)  to 
testify  the  whole  truth,  and  shall  be  carefully  examined. 
His  testimony  shall  be  reduced  to  writing  by  the  magis- 
trate taking  the  deposition,  or  under  his  direction,  and 
shall,  after  it  has  been  reduced  to  writing,  be  subscribed 
by  the  deponent. 

If  a  witness  whose  testimony  may  be  desired  to  be 
taken  by  deposition  be  in  a  foreign  country,  the  deposi- 
tion may  be  taken  before  an  officer  or  person  designated 
by  the  Commission,  or  agreed  upon  by  the  parties  by 


232  INTERSTATE    COMMERCE    ACT. 

stipulation  in  writing  to  be  filed  with  the  Commission. 
All  depositions  must  be  promptly  filed  with  the  Com- 
mission. 

Witnesses  whose  depositions  are  taken  pursuant  to 
this  act,  and  the  magistrate  or  other  officer  taking  the 
same,  shall  severally  be  entitled  to  the  same  fees  as  are 
paid  for  like  services  in  the  courts  of  the  United  States. 

Notification  to  Offenders. 

Sec  13.  That  any  person,  firm,  corporation,  or 
association,  or  any  mercantile,  agricultural,  or  manu- 
facturing society,  or  any  body  politic  or  municipal  or- 
ganization complaining  of  anything  done  or  omitted  to 
be  done  by  any  common  carrier  subject  to  the  provi- 
sions of  this  act  in  contravention  of  the  provisions  there- 
of, may  apply  to  said  Commission  by  petition,  which 
shall  briefly  state  the  facts;  whereupon  a  statement  of 
the  charges  thus  made  shall  be  forwarded  by  the  Com- 
mission to  such  common  carrier,  who  shall  be  called  upon 
to  satisfy  the  complaint  or  to  answer  the  same  in  writing 
within  a  reasonable  time,  to  be  specified  by  the  Commis- 
sion. If  such  conmion  carrier,  within  the  time  specified, 
shall  make  reparation  for  the  injury  alleged  to  have 
been  done,  said  carrier  shall  be  relieved  of  liabihty  to 
the  complainant  only  for  the  particular  violation  of  law 
thus  complained  of.  If  such  carrier  shall  not  satisfy  the 
complaint  within  the  time  specified,  or  there  shall  appear 
to  be  any  reasonable  ground  for  investigating  said  com- 
plaint, it  shall  be  the  duty  of  the  Commission  to  investi- 
gate the  matters  complained  of  in  such  manner  and  by 
such  means  as  it  shall  deem  proper. 

Said  Commission  shall  in  like  manner  investigate  any 


INTERSTATE    COMMERCE    ACT.  233 

complaint  forwarded  by  the  railroad  commissioner  or 
railroad  commission  of  any  State  or  Territory,  at  the 
request  of  such  commissioner  or  commission,  and  may 
institute  any  inquiry  on  its  own  motion  in  the  same  man- 
ner and  to  the  same  effect  as  though  complaint  had  been 
made. 

No  complaint  shall  at  any  time  be  dismissed  because 
of  the  absence  of  direct  damage  to  the  complainant. 

Reports  Are  Legal  Evidence. 

Sec.  14.  (As  amended  March  2,  1889.)  That 
whenever  an  investigation  shall  be  made  by  said  Com- 
mission, it  shall  be  its  duty  to  make  a  report  in  writing 
in  respect  thereto,  which  shall  include  the  findings  of 
fact  upon  which  the  conclusions  of  the  Commission  are 
based,  together  with  its  recommendation  as  to  what 
reparation,  if  any,  should  be  made  by  the  conmion  car- 
rier to  any  party  or  parties  who  may  be  found  to  have 
been  injured;  and  such  findings  so  made  shall  thereafter, 
in  all  judicial  proceedings,  be  deemed  prima  facie  evi- 
dence as  to  each  and  every  fact  found. 

All  reports  of  investigations  made  by  the  Commission 
shall  be  entered  of  record,  and  a  copy  thereof  shall  be 
furnished  to  the  party  who  may  have  complained,  and 
to  any  common  carrier  that  may  have  been  complained 
of. 

The  Commission  may  provide  for  the  publication  of 
its  reports  and  decisions  in  such  form  and  manner  as 
may  be  best  adapted  for  public  information  and  use,  and 
such  authorized  publications  shall  be  competent  evidence 
of  the  reports  and  decisions  of  the  Commission  therein 
contained,  in  all  courts  of  the  United  States,  and  of  the 


234  INTERSTATE    COMMERCE    ACT. 

several  States,  without  any  further  proof  or  authenti- 
cation thereof.  The  Commission  may  also  cause  to  be 
printed  for  early  distribution  its  annual  reports. 

Provisions  for  Reparation. 

Sec  15.  That  if  in  any  case  in  which  an  investiga- 
tion shall  be  made  by  said  Commission  it  shall  be  made 
to  appear  to  the  satisfaction  of  the  Commission,  either 
by  the  testimony  of  witnesses  or  other  evidence,  that 
anything  has  been  done  or  omitted  to  be  done  in  viola- 
tion of  the  provisions  of  this  act,  or  of  any  law  cog- 
nizable by  said  Commission,  by  any  common  carrier,  or 
that  any  injury  or  damage  has  been  sustained  by  the 
party  or  parties  complaining,  or  by  other  parties  ag- 
grieved in  consequence  of  any  such  violation,  it  shall 
be  the  duty  of  the  Commission  to  forthwith  cause  a  copy 
of  its  report  in  respect  thereto  to  be  delivered  to  such 
common  carrier,  together  with  a  notice  to  said  common 
carrier  to  cease  and  desist  from  such  violation,  or  to 
make  reparation  for  the  injury  so  found  to  have  been 
done,  or  both,  within  a  reasonable  time,  to  be  specified 
by  the  Commission;  and  if,  within  the  time  specified,  it 
shall  be  made  to  appear  to  the  Commission  that  such 
common  carrier  has  ceased  from  such  violation  of  law, 
and  has  made  reparation  for  the  injury  found  to  have 
been  done,  in  compliance  with  the  report  and  notice  of 
the  Commission,  or  to  the  satisfaction  of  the  party  com- 
plaining, a  statement  to  that  effect  shall  be  entered  of 
record  by  the  Commission,  and  the  said  common  carrier 
shall  thereupon  be  relieved  from  further  liability  or 
penalty  for  such  particular  violation  of  law. 


INTERSTATE    COMMERCE    ACT.  235 

Appeal  to  the  Courts. 

Sec.  16.  {As  amended  March  2, 1889.)  That  when- 
ever any  common  carrier,  as  defined  in  and  subject  to 
the  provisions  of  this  act,  shall  violate,  or  refuse  or  neg- 
lect to  obey  or  perform  any  lawful  order  or  requirement 
of  the  Commission  created  by  this  act,  not  founded  upon 
a  controversy  requiring  a  trial  by  jury,  as  provided  by 
the  seventh  amendment  to  the  Constitution  of  the 
United  States,  it  shall  be  lawful  for  the  Commission  or 
for  any  company  or  person  interested  in  such  order  or 
requirement,  to  apply  in  a  summary  way,  by  petition, 
to  the  circuit  court  of  the  United  States  sitting  in  equity 
in  the  judicial  district  in  which  the  conunon  carrier  com- 
plained of  has  its  principal  ojffice,  or  in  which  the  viola- 
tion or  disobedience  of  such  order  or  requirement  shall 
happen,  alleging  such  violation  or  disobedience,  as  the 
case  may  be ;  and  the  said  court  shall  have  power  to  hear 
and  determine  the  matter,  on  such  short  notice  to  the 
conmion  carrier  complained  of  as  the  court  shall  deem 
reasonable ;  and  such  notice  may  be  served  on  such  com- 
mon carrier,  his  or  its  officers,  agents,  or  servants,  in  such 
manner  as  the  court  shall  direct;  and  said  court  shall 
proceed  to  hear  and  determine  the  matter  speedily  as  a 
court,  of  equity,  and  without  the  formal  pleadings  and 
proceedings  appUcable  to  ordinary  suits  in  equity,  but 
in  such  manner  as  to  do  justice  in  the  premises;  and 
to  this  end  such  court  shall  have  power,  if  it  think  fit, 
to  direct  and  prosecute  in  such  mode  and  by  such  per- 
sons as  it  may  appoint,  all  such  inquiries  as  the  court 
may  think  needful  to  enable  it  to  form  a  just  judgment 
in  the  matter  of  such  petition;  and  on  such  hearing  the 
findings  of  fact  in  the  report  of  said  Commission  shall 


236  INTERSTATE    COMMERCE    ACT. 

be  prima  facie  evidence  of  the  matters  therein  stated; 
and  if  it  be  made  to  appear  to  such  court,  on  such  hear- 
ing or  on  report  of  any  such  person  or  persons,  that  the 
lawful  order  or  requirement  of  said  Commision  drawn 
in  question  has  been  violated  or  disobeyed,  it  shall  be 
lawful  for  such  court  to  issue  a  writ  of  injunction  or 
other  proper  process,  mandatory  or  otherwise,  to  restrain 
such  common  carrier  from  further  continuing  such  vio- 
lation or  disobedience  of  such  order  or  requirement  of 
said  Commission,  and  enjoining  obedience  to  the  same; 
and  in  case  of  any  disobedience  of  any  such  writ  of  in- 
junction or  other  proper  process,  mandatory  or  other- 
wise, it  shall  be  lawful  for  such  court  to  issue  writs  of  at- 
tachment, or  any  other  process  of  said  court  incident  or 
applicable  to  writs  of  injunction  or  other  proper  process, 
mandatory  or  otherwise,  against  such  common  carrier, 
and  if  a  corporation,  against  one  or  more  of  the  direct- 
ors, officers,  or  agents  of  the  same,  or  against  any  owner, 
lessee,  trustee,  receiver,  or  other  person  failing  to  obey 
such  writ  of  injunction,  or  other  proper  process,  manda- 
tory or  otherwise;  and  said  court  may,  if  it  shall  think 
fit,  make  an  order  directing  such  common  carrier  or  other 
person  so  disobeying  such  writ  of  injunction  or  other 
proper  process,  mandatory  or  otherwise,  to  pay  such  sum 
of  money,  not  exceeding  for  each  carrier  or  person  in 
default  the  sum  of  five  hundred  dollars  for  every  day, 
after  a  day  to  be  named  in  the  order,  that  such  carrier  or 
other  person  shall  fail  to  obey  such  injunction  or  other 
proper  process,  mandatory  or  otherwise;  and  such 
moneys  shall  be  payable  as  the  court  shall  direct,  either 
to  the  party  complaining  or  into  court,  to  abide  the  ulti- 
mate decision  of  the  court,  or  into  the  Treasury;  and 


INTERSTATE    COMMERCE    ACT.  237 

payment  thereof  may,  without  prejudice  to  any  other 
mode  of  recovering  the  same,  be  enforced  by  attachment 
or  order  in  the  nature  of  a  writ  of  execution,  in  hke  man- 
ner as  if  the  same  had  been  recovered  by  a  final  decree 
in  personam  in  such  court. 

Appeal  Not  a  Supersedeas. 

When  the  subject  in  dispute  shall  be  of  the  value 
of  $2,000  or  more,  either  party  to  such  proceeding  before 
said  court  may  appeal  to  the  Supreme  Court  of  the 
United  States,  under  the  same  regulations  now  provided 
by  law  in  respect  of  security  for  such  appeal;  but  such 
appeal  shall  not  operate  to  stay  or  supersede  the  order 
of  the  court  or  the  execution  of  any  writ  or  process 
thereon;  and  such  court  may,  in  every  such  matter,  order 
the  payment  of  such  costs  and  counsel  fees  as  shall  be 
deemed  reasonable.  Whenever  any  such  petition  shall 
be  filed  or  presented  by  the  Commission  it  shall  be  the 
duty  of  the  district  attorney,  under  the  direction  of  the 
Attorney-General  of  the  United  States,  to  prosecute  the 
same;  and  the  costs  and  expenses  of  such  prosecution 
shall  be  paid  out  of  the  appropriation  for  the  expenses  of 
the  courts  of  the  United  States. 

If  the  matters  involved  in  any  such  order  or  require- 
ment of  said  Commission  are  founded  upon  a  contro- 
versy requiring  a  trial  by  jury,  as  provided  by  the 
seventh  amendment  to  the  Constitution  of  the  United 
States,  and  any  such  common  carrier  shall  violate  or 
refuse  or  neglect  to  obey  or  perform  the  same,  after 
notice  given  by  said  Commission  as  provided  in  the  fif- 
teenth section  of  this  act,  it  shall  be  lawful  for  any  com- 
pany or  person  interested  in  such  order  or  requirement 


.238  INTERSTATE    COMMERCE    ACT. 

to  apply  in  a  summary  way  by  petition  to  the  circuit 
court  of  the  United  States  sitting  as  a  court  of  law  in 
the  judicial  district  in  which  the  carrier  complained  of 
his  its  principal  office,  or  in  which  the  violation  or  dis- 
obedience of  such  order  or  requrement  shall  happen, 
alleging  such  violation  or  disobedience  as  the  case  may 
be ;  and  said  court  shall  by  its  order  then  fix  a  time  and 
place  for  the  trial  of  said  cause,  which  shall  not  be  less 
than  twenty  nor  more  than  forty  days  from  the  time  said 
order  is  made,  and  it  shall  be  the  duty  of  the  marshal 
of  the  district  in  which  said  proceeding  is  pending  to 
forthwith  serve  a  copy  of  said  petition,  and  of  said  order, 
upon  each  of  the  defendants,  and  it  shall  be  the  duty 
of  the  defendants  to  file  their  answers  to  said  petition 
within  ten  days  after  the  service  of  the  same  upon  them 
as  aforesaid.  At  the  trial  the  findings  of  fact  of  said 
Commission  as  set  forth  in  its  report  shall  be  prima  facie 
evidence  of  the  matters  therein  stated,  and  if  either 
party  shall  demand  a  jury  or  shall  omit  to  waive  a  jury 
the  court  shall,  by  its  order,  direct  the  marshal  forthwith 
to  summon  a  jury  to  try  the  cause;  but  if  all  the  parties 
shall  waive  a  jury  in  writing  then  the  court  shall  try  the 
issues  in  said  cause  and  render  its  judgment  thereon.  If 
the  subject  in  dispute  shall  be  of  the  value  of  $2,000  or 
more,  either  party  may  appeal  to  the  Supreme  Court 
of  the  United  Statese  under  the  same  regulations  now 
provided  by  law  in  respect  to  security  for  such  appeal; 
but  such  appeal  must  be  taken  within  twenty  days  from 
the  day  of  the  rendition  of  the  judgment  of  said  circuit 
court.  If  the  judgment  of  the  circuit  court  shall  be  in 
favor  of  the  party  complaining  he  or  they  shall  be  en- 
titled to  recover  a  reasonable  counsel  or  attorney's  fee, 


INTERSTATE    COMMERCE    ACT.  239 

to  be  fixed  by  the  court,  which  shall  be  collected  as  part 
of  the  costs  in  the  case.  For  the  purposes  of  this  act, 
excepting  its  penal  provisions,  the  circuit  courts  of  the 
United  States  shall  be  deemed  to  be  always  in  session. 

Sessions  of  the  Commission. 

Sec.  17.  (As  amended  March  2,  1889,)  That  the 
Commission  may  conduct  its  proceedings  in  such  manner 
as  will  best  conduce  to  the  proper  dispatch  of  business 
and  to  the  ends  of  justice,  a  majority  of  the  Commission 
shall  constitute  a  quorom  for  the  transaction  of  busi- 
ness, but  no  Commissioner  shall  participate  in  any  hear- 
ing or  proceeding  in  which  he  has  any  pecuniary  interest. 
Said  Commission  may,  from  time  to  time,  make  or 
amend  such  general  rules  or  orders  as  may  be  requisite 
for  the  order  and  regulation  of  proceedings  before  it, 
including  forms  of  notices  and  the  service  thereof,  which 
shall  conform,  as  nearly  as  may  be,  to  those  in  use  in 
the  courts  of  the  United  States.  Any  party  may  appear 
before  said  Commission  and  be  heard,  in  person  or  by 
attorney.  Every  vote  and  official  act  of  the  Commission 
shall  be  entered  of  record,  and  its  proceedings  shall  be 
public  upon  the  request  of  either  party  interested.  Said 
Commission  shall  have  an  official  seal,  which  shall  be 
judicially  noticed.  Either  of  the  members  of  the  Com- 
mission may  administer  oaths  and  affirmations  and  sign 
subpoenas. 

Salaries  of  Commissiontrs. 

Sec.  18.  [As  amended.)  That  each  Commissioner 
shall  receive  an  annual  salary  of  $10,000,  payable  in  the 
same  manner  as  the  judges  of  the  courts  of  the  United 


240  INTERSTATE    COMMERCE    ACT. 

States.  The  Commission  shall  appoint  a  secretary,  who 
shall  receive  an  annual  salary  of  $3,500,  payable  in  like 
manner.  The  Commission  shall  have  authority  to  em- 
ploy and  fix  the  compensation  of  such  other  employees 
as  it  may  find  necessary  to  the  proper  performance  of 
its  duties.  Until  otherwise  provided  by  law,  the  Com- 
mission may  hire  suitable  offices  for  its  use,  and  shall 
have  authority  to  procure  all  necessary  office  supplies. 
Witnesses  summoned  before  the  Commission  shall  be 
paid  the  same  fees  and  mileage  that  are  paid  witnesses 
in  the  courts  of  the  United  States. 

All  of  the  expenses  of  the  Commission,  including  all 
necessary  expenses  for  transportation  incurred  by  the 
Commissioners,  or  by  their  employees  under  their 
orders,  in  making  any  investigation,  or  upon  official 
business  in  any  other  places  than  in  the  city  of  Washing- 
ton, shall  be  allowed  and  paid  on  the  presentation  of 
itemized  vouchers  therefor,  approved  by  the  chairman  of 
the  Commission. 

Sec.  19.  That  the  principal  office  of  the  Commission 
shall  be  in  the  city  of  Washington,  where  its  general 
sessions  shall  be  held;  but  whenever  the  convenience  of 
the  pubhc  or  the  parties  may  be  promoted  or  delay  or 
expense  prevented  thereby,  the  Commission  may  hold 
special  sessions  in  any  part  of  the  United  States.  It 
may,  by  one  or  more  of  the  Commissioners,  prosecute 
any  inquiry  necessary  to  its  duties,  in  any  part  of  the 
United  States,  into  any  matter  or  quest  bn  of  fact  per- 
taining to  the  business  of  any  commo  )  carrier  subject 
to  the  provisions  of  this  act. 


INTERSTATE    COMMERCE    ACT.  241 

Annual  Reports  From  Corporations. 

Sec.  20.  That  the  Commission  is  hereby  authorized 
to  require  annual  reports  from  all  common  carriers  sub- 
ject to  the  provisions  of  this  act,  to  fix  the  time  and 
prescribe  the  manner  in  which  such  reports  shall  be 
made,  and  to  require  from  such  carriers  specific  answers 
to  all  questions  upon  which  the  Commission  may  need 
information.  Such  annual  reports  shall  show  in  detail 
the  amount  of  capital  stock  issued,  the  amounts  paid 
therefor,  and  the  manner  of  payment  for  the  same ;  the 
dividends  paid,  the  surplus  fund,  if  any,  and  the  number 
of  stockholders;  the  funded  and  floating  debts  and  the 
interest  paid  thereon;  the  cost  and  value  of  the  car- 
rier's property,  franchises,  and  equipments ;  the  number 
of  employees  and  the  salaries  paid  each  class;  the 
amounts  expended  for  improvements  each  year,  how  ex- 
pended, and  the  character  of  such  improvements;  the 
earnings  and  receipts  from  each  branch  of  business  and 
from  all  sources ;  the  operating  and  other  expenses ;  the 
balances  of  profit  and  loss;  and  a  complete  exhibit  of 
the  financial  operations  of  the  carrier  each  year,  includ- 
ing an  annual  balance-sheet.  Such  reports  shall  also 
contain  such  information  in  relation  to  rates  or  regula- 
tions concerning  fares  or  freights,  or  agreements,  ar- 
rangements, or  contracts  with  other  common  carriers, 
as  the  Commission  may  require;  and  the  said  Commis- 
sion may,  within  its  discretion,  for  the  purpose  of 
enabling  it  the  better  to  carry  out  the  purposes  of  this 
act,  prescribe  (if  in  the  opinion  of  the  Commission  it  is 
practicable  to  prescribe  such  uniformity  and  methods  of 
keeping  accounts)  a  period  of  time  within  which  all  com- 
mon carriers  subject  to  the  provisions  of  this  act  shall 

I.B.L.     Vol.  8—16 


242  INTERSTATE    COMMERCE    ACT. 

have,  as  near  as  may  be,  a  uniform  system  of  accounts, 
and  the  manner  in  which  such  accounts  shall  be  kept. 

Sec.  21.  (As  amended  March  2,  1889.)  That  the 
Commission  shall,  on  or  before  the  first  day  of  Decem- 
ber in  each  year,  make  a  report,  which  shall  be  trans- 
mitted to  Congress,  and  copies  of  which  shall  be  distrib- 
uted as  are  the  other  reports  transmitted  to  Congress 
This  report  shall  contain  such  information  and  data  col- 
lected by  the  Commission  as  may  be  considered  of  value 
in  the  determination  of  questions  connected  with  the 
regulation  of  commerce,  together  with  such  recommen- 
dations as  to  additional  legislation  relating  thereto  as  the 
Commission  may  deem  necessary;  and  the  names  and 
compensation  of  the  persons  employed  by  said  Commis- 
sion. 

Exceptions  May  Be  Made. 

Sec.  22.  {As  amended  March  2, 1889,  and  February 
8, 1895.)  That  nothing  in  this  act  shall  prevent  the  car- 
riage, storage,  or  handling  of  property  free  or  at  re- 
duced rates  for  the  United  States,  State,  or  municipal 
governments,  or  for  charitable  purposes,  or  to  or  from 
fairs  and  expositions  for  exhibition  thereat,  or  the  free 
carriage  of  destitute  and  homeless  persons  transported 
by  charitable  societies,  and  the  necessary  agents  em- 
ployed in  such  transportation,  or  the  issuance  of  mileage, 
excursion,  or  commutation  passenger  tickets;  nothing 
in  this  act  shall  be  construed  to  prohibit  any  common 
carrier  from  giving  reduced  rates  to  ministers  of  religion, 
or  to  municipal  governments  for  the  transportation  of 
indigent  persons,  or  to  inmates  of  the  National  Homes 
or  State  Homes  for  Disabled  Volunteer  Soldiers,  and 


INTERSTATE    COMMERCE    ACT.  243 

of  Soldiers'  and  Sailors'  Orphan  Homes,  including  those 
about  to  enter  and  those  returning  home  after  discharge, 
under  arrangements  with  the  boards  of  managers  of 
said  homes;  nothing  in  this  act  shall  be  construed  to 
prevent  railroads  from  giving  free  carriage  to  their  own 
officers  and  employees,  or  to  prevent  the  principal  offi- 
cers of  any  railroad  company  or  companies  from  ex- 
changing passes  or  tickets  with  other  railroad  companies 
for  their  officers  and  employees ;  and  nothing  in  this  act 
contained  shall  in  any  way  abridge  or  alter  the  remedies 
now  existing  at  common  law  or  by  statute,  but  the  pro- 
visions of  this  act  are  in  addition  to  such  remedies: 

Provided,  That  no  pending  litigation  shall  in  any  way 
be  affected  by  this  act : 

Provided  further.  That  nothing  in  this  act  shall  pre- 
vent the  issuance  of  joint  interchangeable  5,000-mile 
tickets,  with  special  privileges  as  to  the  amount  of  free 
baggage  that  may  be  carried  under  mileage  tickets  of 
1,000  or  more  miles.  But  before  any  common  carrier, 
subject  to  the  provisions  of  this  act,  shall  issue  any  such 
joint  interchangeable  mileage  tickets  with  special  privi- 
leges, as  aforesaid,  it  shall  file  with  the  Interstate  Com- 
merce Commission  copies  of  the  joint  tariffs  of  rates, 
fares,  or  charges  on  which  such  joint  interchangeable 
mileage  tickets  are  to  be  based,  together  with  specifica- 
tions of  the  amount  of  free  baggage  permitted  to  be  car- 
ried under  such  tickets,  in  the  same  manner  as  common 
carriers  are  required  to  do  with  regard  to  other  joint 
rates  by  section  6  of  this  act ;  and  all  provisions  of  said 
section  6  relating  to  joint  rates,  fares,  and  charges  shall 
be  observed  by  said  common  carriers  and  enforced  by  the 
Interstate  Commerce  Commission  as  fully  with  regard 


244  INTERSTATE    COMMERCE    ACT. 

to  such  joint  interchangeable  mileage  tickets  as  with 
regard  to  other  joint  rates,  fares,  and  charges  referred 
to  in  said  section  6.  It  shall  be  unlawful  for  any  com- 
mon carrier  that  has  issued  or  authorized  to  be  issued 
any  such  joint  interchangeable  mileage  tickets  to  de- 
mand, collect,  or  receive  from  any  person  or  persons  a 
greater  or  less  compensation  for  transportation  of  per- 
sons or  baggage  under  such  joint  interchangeable  mile- 
age tickets  than  that  required  by  the  rate,  fare,  or  charge 
specified  in  the  copies  of  the  joint  tariff  of  rates,  fares, 
or  charges  filed  with  the  Commision  in  force  at  the  time. 
The  provisions  of  section  10  of  this  act  shall  apply  to 
any  violation  of  the  requirements  of  this  proviso. 

Jurisdiction  of  the  Courts. 

New  Section  (Added  March  2,  1889),  That  the 
circuit  and  district  courts  of  the  United  States  shall  have ' 
jurisdiction  upon  the  relation  of  any  person  or  persons, 
firm,  or  corporation,  alleging  such  violation  by  a  com- 
mon carrier,  of  any  of  the  provisions  of  the  act  to  which 
this  is  supplement  and  all  acts  amendatory  thereof,  as 
prevents  the  relator  from  having  interstate  traffic  moved 
by  said  common  carrier  at  the  same  rates  as  are  charged, 
or  upon  terms  or  conditions  as  favorable  as  those  given 
by  said  common  carrier  for  like  traffic  under  similar 
conditions  to  any  other  shipper,  to  issue  a  writ  or  writs 
of  mandamus  against  said  common  carrier,  commanding 
such  common  carrier  to  move  and  transport  the  traffic, 
or  to  furnish  cars  or  other  facilities  for  transportation 
for  the  party  applying  for  the  writ : 

Provided,  That  if  any  question  of  fact  as  to  the  proper 
compensation  to  the  common  carrier  for  the  service  to 


INTERSTATE    COMMERCE    ACT.  245 

be  enforced  by  the  writ  is  raised  by  the  pleadings,  the 
writ  of  peremptory  mandamus  may  issue,  notwithstand- 
ing such  question  of  fact  is  undetermined,  upon  such 
terms  as  to  security,  payment  of  money  into  the  court, 
or  otherwise,  as  the  court  may  think  proper,  pending  the 
determination  of  the  question  of  fact : 

Provided,  That  the  remedy  hereby  given  by  writ  of 
mandamus  shall  be  cumulative,  and  shall  not  be  held  to 
exclude  or  interfere  with  other  remedies  provided  by 
this  act  or  the  act  to  which  it  is  a  supplement. 

Testimony  Must  Be  Given. 

No  person  shall  be  excused  from  attending  and  testi- 
fying or  from  producing  books,papers,  tariffs,  contracts, 
agreements  and  documents  before  the  Interstate  Com- 
merce Commission,  or  in  obedience  to  the  subpoena  of 
the  Commission,  whether  such  subpoena  be  signed  or 
issued  by  one  or  more  Commissioners,  or  in  any  cause  or 
proceeding,  criminal  or  otherwise,  based  upon  or  grow- 
ing out  of  any  alleged  violation  of  the  act  of  Congress, 
entitled  "An  act  to  regulate  commerce,"  approved  Feb- 
ruary 4th,  1887,  or  of  any  amendment  thereof,  on  the 
ground  or  for  the  reason  that  the  testimony  or  evidence, 
documentary  or  otherwise,  required  of  him,  may  tend  to 
criminate  him  or  subject  him  to  a  penalty  or  forfeiture. 
But  no  person  shall  be  prosecuted  or  subjected  to  any 
penalty  or  forfeiture  for  or  on  account  of  any  transac- 
tion, matter  or  thing,  concerning  which  he  may  testify, 
or  produce  evidence,  documentary  or  otherwise,  before 
said  Commission,  or  in  obedience  to  its  subpoena,  or  the 
subpoena  of  either  of  them,  or  in  any  such  case  or  pro- 
ceeding: 


246  INTERSTATE    COMMERCE    ACT. 

Provided,  That  no  person  so  testifying  shall  be 
exempt  from  prosecution  and  punishment  for  perjury 
committed  in  so  testifying. 

Any  person  who  shall  neglect  or  refuse  to  attend  and 
testify,  or  to  answer  any  lawful  inquiry,  or  to  produce 
books,  papers,  tariffs,  contracts,  agreements  and  docu- 
ments, if  in  his  power  to  do  so,  in  obedience  to  the  sub- 
poena or  lawful  requirement  of  the  Commission  shall 
be  guilty  of  an  offense,  and  upon  conviction  thereof  by 
a  court  of  competent  jurisdiction  shall  be  punished  by 
fine,  not  less  than  $100  nor  more  than  $5,000,  or  by 
imprisonment  for  not  more  than  one  year,  or  by  both 
such  fine  and  imprisonment. 

Use  of  Safety  Appliances. 

That  from  and  after  the  first  day  of  January,  1898, 
it  shall  be  unlawful  for  any  common  carrier  engaged  in 
interstate  commerce  by  railroad  to  use  on  its  line  any 
locomotive  engine  in  moving  interstate  traffic  not 
equipped  with  a  power  driving-wheel  brake  and  ap- 
pliances for  operating  the  train-brake  system,  or  to  run 
any  train  in  such  traffic  after  said  date  that  has  not  a 
sufficient  number  of  cars  in  it  so  equipped  with  power  or 
train  brakes  that  the  engineer  on  the  locomotive  draw- 
ing such  train  can  control  its  speed  without  requiring 
brakemen  to  use  the  common  hand  brake  for  that  pur- 
pose. 

Sec.  2.  That  on  and  after  the  first  day  of  January, 
1898,  it  shall  be  unlawful  for  any  such  common  carrier 
to  haul  or  permit  to  be  hauled  or  used  on  its  line  any  car 
used  in  moving  interstate  traffic  not  equipped  with  coup- 
lers coupling  automatically  by  impact,  and  which  can 


INTERSTATE    COMMERCE    ACT.  247 

be  uncoupled  without  the  necessity  of  men  going  be- 
tween the  ends  of  the  cars. 

Sec  3.  That  when  any  person,  firm,  company,  or 
corporation  engaged  in  interstate  conmierce  by  railroad 
shall  have  equipped  a  sufficient  number  of  its  cars  so  as 
to  comply  with  the  provisions  of  section  1  of  this  act, 
it  may  lawfully  refuse  to  receive  from  connecting  lines 
of  road  or  shippers  any  cars  not  equipped  sufficiently, 
in  accordance  with  the  first  section  of  this  act,  with  such 
power  or  train  brakes  as  will  work  and  readily  inter- 
change with  the  brakes  in  use  on  its  own  cars,  as  re- 
quired by  this  act. 

Sec  4.  That  from  and  after  the  first  day  of  July, 
1895,  until  otherwise  ordered  by  the  Interstate  Com- 
merce Commission,  it  shall  be  unlawful  for  any  railroad 
company  to  use  any  car  in  interstate  commerce  that  is 
not  provided  with  secure  grab  irons  or  handholds  in  the 
ends  and  sides  of  each  car  for  greater  security  to  men  in 
coupling  and  uncoupling  cars. 

Sec  5.  That  within  ninety  days  from  the  passage  of 
this  act  the  American  Railway  Association  is  authorized 
hereby  to  designate  to  the  Interstate  Commerce  Com- 
mission the  standard  height  of  drawbars  for  freight  cars, 
measured  perpendicular  from  the  level  of  the  tops  of 
the  rails  to  the  centers  of  the  drawbars,  for  each  of 
the  several  gauges  of  railroads  in  use  in  the  United 
States,  and  shall  fix  a  maximum  variation  from  such 
standard  height  to  be  allowed  between  the  drawbars  of 
empty  and  loaded  cars.  Upon  their  determination  being 
certified  to  the  Interstate  Commerce  Commission,  said 
Commission  shall  at  once  give  notice  of  the  standard 
fixed  upon  to  all  common  carriers,  owners,  or  lessees 


248  INTERSTATE    COMMERCE    ACT, 

engaged  in  interstate  commerce  in  the  United  States  by 
such  means  as  the  Commission  may  deem  proper.  But 
should  said  association  fail  to  determine  a  standard  as 
above  provided,  it  shall  be  the  duty  of  the  Interstate 
Commerce  Commission  to  do  so,  before  July  1st,  1894, 
and  immediately  to  give  notice  thereof  as  aforesaid. 
And  after  July  1st,  1895,  no  cars,  either  loaded  or  un- 
loaded, shall  be  used  in  interstate  traffic  which  do  not 
comply  with  the  standard  above  provided  for. 

Penalties  for  Violation. 

Sec  6.  {As  amended  April  1,  1896,)  That  any 
such  common  carrier  using  any  locomotive  engine,  run- 
ning any  train,  or  hauling  or  permitting  to  be  hauled  or 
used  on  its  line  any  car  in  violation  of  any  of  the  provi- 
sions of  this  act,  shall  be  liable  to  a  penalty  of  $100  for 
each  and  every  such  violation,  to  be  recovered  in  a  suit  or 
suits  to  be  brought  by  the  United  States  district  attorney 
in  the  district  court  of  the  United  States  having  juris- 
diction in  the  locality  where  such  violation  shall  have 
been  committed ;  and  it  shall  be  the  duty  of  such  district 
attorney  to  bring  such  suits  upon  duly  verified  informa- 
tion being  lodged  with  him  of  such  violation  having  oc- 
curred; and  it  shall  also  be  the  duty  of  the  Interstate 
Commerce  Commission  to  lodge  with  the  proper  district 
attorneys  information  of  any  such  violations  as  may 
come  to  its  knowledge : 

Provided,  That  nothing  in  this  act  contained  shall 
apply  to  trains  composed  of  four-wheel  cars  or  to  trains 
composed  of  eight-wheel  standard  logging  cars  where 
the  height  of  such  car  from  top  of  rail  to  center  of  coup- 
ling does  not  exceed  twenty-five  inches,  or  to  locomotives 


INTEESTATE    COMMERCE    ACT.  249 

used  in  hauling  such  trains  when  such  cars  or  locomotives 
are  exclusively  used  for  the  transportation  of  logs. 

Sec  7.  That  the  Interstate  Commerce  Commission 
may  from  time  to  time  upon  full  hearing  and  for  good 
cause  extend  the  period  within  which  any  common  car- 
rier shall  comply  with  the  provisions  of  this  act. 

Employes  Do  Not  Assuone  Risk. 

Sec.  8.  That  any  employee  of  any  such  common 
carrier  who  may  be  injured  by  any  locomotive,  car,  or 
train  in  use  contrary  to  the  provision  of  this  act,  shall 
not  be  deemed  thereby  to  have  assimied  the  risk  thereby 
occasioned,  although  continuing  in  the  employment  of 
such  carrier  after  the  unlawful  use*  of  such  locomotive, 
car,  or  train,  had  been  brought  to  his  knowledge. 

Note. — ^Prescribed  standard  height  of  drawbars:  Standard-gauge  roads, 
34%  Inches;  narrow-gauge  roads,  26  inches;  maximum  variation  between 
loaded  and  empty  cars,  3  inches. 


Further  Provisions  for  Safety. 

An  act  to  amend  an  act  entitled  "An  act  to  promote  the  safety  of  employees 
and  travelers  upon  railroads  by  compelling  common  carriers  engaged  in 
interstate  commerce  to  equip  their  cars  with  automatic  couplers  and  con- 
tinuous brakes  and  their  locomotives  with  driving-wheel  brakes,  and  for 
other  purposes,"  approved  March  2d,  1893,  and  amended  April  1st,  1896. 

Be  it  enacted  by  the  Senate  and  House  of  Represen- 
tatives of  the  United  States  of  America^  in  Congress 
assembled: 

That  the  provisions  and  requirements  of  the  Act  en- 
titled "An  Act  to  promote  the  safety  of  employees  and 
travelers  upon  railroads  by  compelUng  conmion  carriers 
engaged  in  interstate  commerce  to  equip  their  cars  with 
automatic  couplers  and  continuous  brakes,  and  their 
locomotives  with  driving-wheel  brakes,  and  for  other 
purposes,"  approved  March  2d,  1893,  and  amended 


250  INTERSTATE    COMMERCE    ACT. 

April  1st,  1896,  shall  be  held  to  appl}^  to  common  car- 
riers by  railroads  in  the  Territories  and  the  District  of 
Columbia,  and  shall  apply  in  all  cases,  whether  or  not 
the  couplers  brought  together  are  of  the  same  kind, 
make,  or  type;  and  the  provisions  and  requirements 
hereof  and  of  said  Acts  relating  to  train  brakes,  auto- 
matic couplers,  grab  irons,  and  the  height  of  drawbars, 
shall  be  held  to  apply  to  all  trains,  locomotives,  tenders, 
cars,  and  similar  vehicles  used  on  any  railroad  engaged 
in  interstate  commerce,  and  in  the  Territories  and  the 
District  of  Columbia,  and  to  all  other  locomotives,  ten- 
ders, cars,  and  similar  vehicles  used  in  connection  there- 
with, excepting  those  trains,  cars,  and  locomotives 
exempted  by  the  provisions  of  section  6  of  said  Act  of 
March  2d,  1893,  as  amended  by  the  Act  of  April  1st, 
1896,  or  which  are  used  upon  street  railways. 

Percentage  of  Brakes  Required. 

Sec.  2.  That  whenever,  as  provided  in  said  act,  any 
train  is  operated  with  power  or  train  brakes,  not  less 
than  fifty  per  centum  of  the  cars  in  such  train  shall  have 
their  brakes  used  and  operated  by  the  engineer  of  the 
locomotive  drawing  such  train;  and  all  power-braked 
cars  in  such  train  which  are  associated  together  with  said 
fifty  per  centum  shall  have  their  brakes  so  used  and  oper- 
ated; and,  to  more  fully  carry  into  effect  the  objects 
of  said  act,  the  Interstate  Commerce  Commission  may, 
from  time  to  time,  after  full  hearing,  increase  the  mini- 
mum percentage  of  cars  in  any  train  required  to  be  oper- 
ated with  power  or  train  brakes  which  must  have  their 
brakes  used  and  operated  as  aforesaid;  and  failure  to 
comply  with  any  such  requirement  of  the  said  Interstate 


INTERSTATE    COMMERCE    ACT.  251 

Commerce  Commission  shall  be  subject  to  the  like  pen- 
alty as  failure  to  comply  with  any  requirement  of  this 
section. 

Sec  3.  That  the  provisions  of  this  act  shall  not 
take  effect  until  September  1st,  1903.  Nothing  in  this 
act  shall  be  held  or  construed  to  relieve  any  common 
carrier,  the  Interstate  Commerce  Commission,  or  any 
United  States  district  attorney  from  any  of  the  provi- 
sions, powers,  duties,  liabilities,  or  requirements  of  said 
Act  of  March  2d,  1893,  as  amended  by  the  Act  of  April 
1st,  1896;  and  all  of  the  provisions,  powers,  duties,  re- 
quirements and  liabilities  of  said  Act  of  March  2d,  1893, 
as  amended  by  the  Act  of  April  1st,  1896,  shall,  except 
as  specifically  amended  by  this  act,  apply  to  this  act. 


CHICAGO 


MOnTAITA— Continned 

(For  explanation  of  Missouri  River 

Gateways,  see  page  13.) 

ColnmbiA  Fall*  vi«  St.  Paul  and 
Gt.  Nor 

do  via  Billings  or  Deliver.  Bil- 
lines  and  Gt.  Not..^^-- 

do     via    Missouri    River    gate- 

^  ways,  Billings  or  Denver, 

Billings  and  Gt.  Nor. . .  • 

Cusbman  via  Billings  and  Gt.  Nor. 

do  via  Denver,  Billing!  aad 
Gt.  Nor 

do     via  St.  Paul  and  Gt.  Nof  ... 

Ctwter  via  St.  Paul. 

Vfi  Lodee  via  C.  Mv.  &  St,  P.- 
C.  M.  &P.  S 

do  via  St.  Paul  and  C.  M.  & 
St.  P.-C.  M.  &  P.  S.  or 
Nor.  Pac •. . 

do  via  Billings  or  Denver  and 
Billings f 

do  via  UUssouri  River  gateways 
and  Billings  or  Denver 
and  Billings 

do  via  Missouri  River  gate- 
ways. Granger  or  Ogdea 
and  Butte 

do  via  Denver,  Colorado  Spgs. 
or  Pueblo,  Ogden  and 
Butte 

do  via  Missouri  River  gate- 
ways, Denver,  Colorado 
Sprime,  Pueblo,  Ogden 
and  Butte 

do  via  Denver.  Granger  and 
Butte-. 

do  via  Missouri  River  gate- 
ways, Denver,  Granger 
and  Butte 

do    via  St.  Louis 

Dillon  via  Missouri  River  gateways 
and  Granger  or  Ogden . . 

do  via  Denver,  Colorado  Spgs. 
or  Pueblo  ai)d  Ogden.. 

do  via  Missouri  R  i  vje  r  gate- 
ways, Denver,  Colorado 
~    ■         or  Pueblo   and 


Ogden,....*.. .-....,» 
do    vUi  Deliver  and  Granger,, 
do    via  Miapuri  River  gate- 
ways, Denver  &  Granger 

do     via  St. Louis ■ 

Dodge  via  C.  M.  &  St.  P.-C.M.&  P.S 

do    via  St.  Paul 

Drummond  via  C.  M.  &  St.  P.-C.M 

do  via  St.'  Paiil'and  C.  M.  &  St 
P.-C.M.  &  P.S.  or  Nor, 
Pac 


.do    via  tBillines  and  Nor.  Pac. 
Eaaez  via  St.  Paul. 


via     Billings    or    Denyer. 

Billings  and  Gt.  Nor 

via   Missouri    River   Gate- 
Billings  or  Denver, 
lings  and  Gt.  Nor.... 


'ays. 
Jillini 


8d 
CUft 


40  70 
40  70  u 


37  40 
36  90 
2d  M 


88  60 

88  60 

88  60 
88  60 

88  60 


87  M 
87  40 


37  40 
87  40 
*24  60 
M60 


88  6S 

89  6S 

89  40 


8  80 
6  40 

6  as 

6  16 
4  80 


6  4S 
•  46 

6  46 

6  48 


6  46 
6  46 


6  26 
6  26 


6  26 
6  26 

\»i  10 
4  10 


6  60 
«  60 
6  60 


CHICAGO 


MONTAlf  A— Continued 

(For  explanation  of  Missouri  River 

Gateways,  see  page  13.) 

Forsyth  via  C.M.&  St.P.-C.M.ft  P.S. 

do    via  St.  Paul 

Fromber^  via  C.  B.  A  Q. 

do  via  Missouri  River  gate- 
ways and  C.  B.  &  Q 

do    via  Billings  and  Nor.  Pac. 

do    via  St.  Paul  and  Nor.  Pac. 

do    via  Denver  and  C.B.  &Q. 

do  via  Denver,  BiUings  and 
Nor.  Pac. ^..,.... 

do    via  St.  Louis. 

Gardiner  via  St.  Paul  and  Nor.Pac. 


do    via 


oV   and    BiUings 
do    via  St.  Louis  and  Billings. . 
Garrison  viaC.  M.  &  St.  P.-C.  M. 

&P.S 

do    via  St.  Paul  and   C.  M.  & 
St.  P,-C.  M.  &  P,  S.  or 

Nor.  Pac 

do    via  Billings  or  Denver  and 

BUlings 

do    via  Missouri  River  gateways 
and  BiUings  or  Denver 

and  Billings 

do    via  Missouri  River  gate 
ways.  Granger  or  Ogden 
and  Butte  or  Silver  Bow 
do    via  Denver,  Colorado  Spgs. 
or    Pueblo,    Ogden    and 
Butte  or  Silver  Bow .... 
do    via  Missouri  River  gate- 
ways, Denver,   Colorado 
Springs,    Pueblo,    Ogden 
and  Butte  or  Silver  Bow 
da    via  Denver,  Granger  and 

Butte  or  Silver  Bow,. 
do    via  Missouri  River  gate- 
ways,   Denver,  .Granger 
and  jButte  or  Silver  Bow 

do    via  St.  Louis 

Glasgow  via  St.  Paul , 

Glendive  via  St.  Paul  and  Nor.  Pae. 
Great  Falls  via  St.  Paul  and  Gt.Nor, 
do    via    Missouri    River   Gate- 
ways, Billings  or  Denver, 
BiUings  and  Gt.  Nor.. .., . 
Hamilton  via  St.  Paul  and  Nor.Pac, 
'  do     via  Billings  or  Denver  and 

BilUnps..., 

Bariowtoni  via  C.  M.  &  St.  P.-C.  M, 

&P.  S 

do    viaSt.PaulandC.M.&St.P, 
Helena  via  St.  Paul  and  Gt.  Nor, 

or  Nor.  Pac ; 

killings  or  Denver,  BiU' 


do    vial 


incs  ana  Nor.  Pac 
Via  Missouri  River  gateways 

emd   BiUings   or  Denver, 

Billings  and  Nor.  Pac. . . . 
via  Missouri  River  gatewaySj 

Granger  or  Ogden.  Butte 

•adGt.Nor.., 


*27  20 
27  20 
81  86 

81  86 
81  36 
81  86 
88  06 


36  86 
89  05 
85  36 


38  96 
88  96 

88  86 

88  86 

88  96 

88  86 
88  96 


38  96 
38  96 
28  60 
23  60 
86.90 


37  40 
42  46 

42  46 

'82  86 
88  86 

87  40 

87  40 

87  40 

87  40 


i 


*4  68 

4  66 
6  86 


6  60 
6  60 

6  60 

6  60 

6  60 

6  60 
8  60 


8  86 
6  38 

626 

696 


*Basing  fare  only. 

tAlso  appUes  via  C.  B.  ft  Q.  to  BiUngs  via  Denvtr  or  via  any  route  to  Denver  thence  C.  B.  ft  Q.  to  B01ia|s. 


Sample  Page  of  Joint  Passenger  Tariff  from  Chicago  to  Destina- 
tions in  the  United  States,  Canada,  Mexico,  Cuba,  and  Central  and 
South  America. 


CHAPTER  XVII    (PART  2). 
INTERSTATE  COMMERCE  REGULATION. 

In  the  early  days  of  railroad  construction  in  the 
United  States  the  question  was  "how  to  get  railroads, 
not  how  to  control  them."  Indeed  it  is  probably  true 
that  capitalists  would  not  have  put  their  money  into 
the  building  of  railroads  if  their  operation  had  been 
governed  by  the  detailed  regulations  now  in  force. 
Private  enterprise  would  have  been  so  far  discouraged 
as  to  have  made  the  remarkable  era  of  railroad  construc- 
tion from  1850  to  1885  entirely  impossible.  But  it  is 
also  probable  that  if  careful  governmental  supervision 
had  attended  the  operation  of  our  first  railroads,  most 
of  the  modern  evils  of  railroad  management  would  have 
been  avoided. 

The  common  law  declared  that  rates  must  be  "reason- 
able," but  failed  to  provide  any  means  of  fixing  a  rea- 
sonable rate.  At  first,  when  every  new  railroad  was  a 
boon  to  everyone,  almost  any  rate  was  reasonable  in 
comparison  with  the  old  wagon  rates.  Shippers  remem- 
bered that  the  wagon  rate  from  Philadelphia  to  Pitts- 
burgh prior  to  the  construction  of  the  railroads  was 
$125  per  ton. 

As  a  result  of  the  lax  laws  intended  to  stimulate 
construction  the  officials  and  stockholders  of  railroads 
were  led  to  believe  that  they  could  operate  their  roads 

253 


254  INTERSTATE  COMMERCE  REGULATION 

just  as  they  pleased,  without  regard  to  the  public  in- 
terest. Hence  they  "charged  the  traffic  what  it  would 
bear."  They  recognized  no  duty  to  the  community,  no 
public  trust.  If  conditions  permitted  them  to  exact 
very  high  rates,  they  regarded  it  as  their  right  to  do  so. 
If  favoritism  was  shown  to  powerful  shippers  and  im- 
portant localities,  it  was  regarded  as  good  business 
policy.  The  only  duty  recognized  was  that  to  the  stock- 
holders. 

Movement  for  Federal  Regulation. 

By  the  year  1885,  however,  the  American  public  be- 
gan to  realize  that  the  vital  problem  was  no  longer  how 
to  stimulate  construction,  but  how  to  control  the  roads 
already  in  operation  so  as  to  make  them  serve  the  public 
to  the  best  advantage.  The  authority  of  each  State 
being  limited  to  the  control  of  railroad  services  and 
charges  within  its  own  boundaries,  it  became  evident 
that  the  Federal  Government  must  cooperate  with  the 
states  in  order  to  solve  the  problems  connected  with 
interstate  commerce. 

The  movement  for  Federal  regulation  of  railways 
began  in  1872,  when  upon  a  recommendation  made  by 
President  Grant  in  his  annual  message,  the  Senate  of 
the  United  States  appointed  a  committee  to  make  a 
tliorough  investigation  of  the  situation.  This  committee 
reported  in  1874  in  favor  of  Federal  legislation.  Action 
was  deferred,  however,  and  the  first  real  step  toward 
framing  a  law  to  meet  and  prevent  the  prevailing  evils 
was  not  taken  until  March  17,  1885,  when  the  Senate 


INTERSTATE  COMMERCE  REGULATION  255 

adopted  a  resolution  authorizing  the  President  to  ap- 
point a  committee  of  senators  to  investigate  and  report 
on  the  subject  of  the  "regulation  of  transportation  by 
railroad,  and  by  water  lines  in  competition  or  connec- 
tion therewith,  of  freight  and  passengers  between  the 
several  states."  This  committee,  headed  by  Senator 
Cullom  of  Illinois,  reported  in  1886,  with  a  bill  for  the 
Federal  regulation  of  railways,  and  this  bill,  with  va- 
rious amendments,  became  the  Interstate  Commerce 
Act,  which  was  enacted  in  1887. 

The  act  of  1887  has  been  strengthened  from  time  to 
time  by  amendments.  The  Elkins  act  of  1903  made 
very  important  changes  in  the  law,  while  the  Hepburn 
act  of  1906  brought  the  legislation  practically  to  its 
present  shape.  The  former  law  was  aimed  particularly 
at  the  prevention  of  discriminations;  while  the  Hep- 
burn act  gave  the  Interstate  Commerce  Commission, 
which  had  been  created  by  the  act  of  1 887,  the  power  to 
revise  railway  rates  and  to  prescribe  uniform  ac- 
counting. 

Changes  in  the  Common  Law. 

The  principal  changes  in  the  common  law  made  by 
the  act  of  1887  were  as  follows: 

(a)  It  required  publicity  of  rates  and  of  rules 
affecting  rates,  and  provided  that  the  only  legal  rate 
was  that  published  and  filed  in  accordance  with  the  act, 
thus  creating  a  definite  standard  of  charge  equally  ac- 
cessible to  all  shippers. 

(b)  It  incorporated  into  a  statute  the  common  law 
duty  of  refraining  from  exacting  unreasonable  charges. 


256  INTERSTATE  COMMERCE  REGULATION 

and  from  unduly  discriminating  between  shippers  or 
localities  in  rates  or  facilities. 

(c)  It  created  a  commission  to  supervise  and  regu- 
late the  publicity  requirements,  with  limited  powers  to 
enforce  the  other  provisions  of  the  act, 

(d)  It  gave  to  the  Federal  courts  jurisdiction  to 
enforce  by  injunction  the  lawful  orders  of  the  com- 
mission. 

(e)  It  created  penal  and  criminal  liability  on  the 
part  of  the  officers  of  common  carriers  for  violating 
provisions  of  the  act. 

(f)  It  required  the  allowance  of  equal  facilities  to 
competing  lines. 

In  1889  the  following  important  provisions  were  in- 
troduced into  the  law: 

(g)  Providing  a  remedy  by  mandamus  without 
previous  investigation  by  the  commission  in  case  of 
denial  of  equal  facilities  to  shippers. 

(h)  Creating  penal  and  criminal  offenses  on  the 
part  of  shippers  in  respect  to  obtaining  lower  rates 
by  means  of  false  billing  and  similar  devices. 

(i)  Providing  for  punishment  by  imprisonment  of 
the  officers  of  common  carriers  violating  the  provisions 
of  the  act  prohibiting  the  giving  of  rebates  and  discrim- 
inations. 

(j)     Requiring  the  publication  of  joint  tariffs. 

The  Elkins  Act. 

The  changes  in  the  Interstate  Commerce  law  made 
by  the  Elkins  act  were  as  follows: 

(a)     It  abolished  imprisonment  as  a  punishment  for 


INTERSTATE  COMMERCE  REGULATION  257 

violating  the  Interstate  Commerce  act.    [The  imprison- 
ment penalty  was  restored  by  the  Hepburn  act  in  1896.] 

(b)  It  made  the  carrier  corporation  criminally  re- 
sponsible, as  well  as  its  officers. 

(c)  It  made  shippers  who  received  rebates  crimi- 
nally liable  for  so  doing. 

(d)  It  gave  the  courts  jurisdiction  to  enjoin  viola- 
tions of  the  act  without  previous  investigation  by  the 
commission. 

The  Hepburn  Act. 

The  most  important  changes  introduced  by  the  Hep- 
burn act  were  as  follows : 

(a)  It  gave  the  commission  power,  after  due  inves- 
tigation, to  fix  rates  to  be  observed  in  the  future,  and 
prescribed  a  prohibitive  penalty — $5,000  a  day — for 
disobeying  the  orders  of  the  commission  regarding 
rates. 

(b)  It  made  it  the  statutory  duty  of  common  car- 
riers to  provide  and  furnish  transportation  on  reason- 
able request  therefor. 

(c)  It  required  connecting  lines  to  form  through 
routes  with  joint  rates  applicable  thereto. 

(d)  It  prohibited  carriers  from  transporting  com- 
modities produced  by  them,  or  in  which  they  had  an 
interest. 

(e)  It  restored  the  imprisonment  clause  expunged 
by  the  Elkins  act  and  created  a  number  of  other  pun- 
ishable offenses. 

(f)  It  required  carriers  to  construct,  maintain  and 


258  INTERSTATE  COMMERCE  REGULATION 

operate  switch  connections  for  shippers  and  for  lateral 
branch  lines. 

(g)  It  introduced  a  clause  regulating  the  issuance 
of  passes. 

(h)  It  altered  the  time  of  notice  of  increase  or  re- 
duction of  rates  to  30  days,  and  otherwise  modified  the 
requirements  with  regard  to  publication  and  filing  of 
rates. 

(i)  It  gave  the  commission  power  to  regulate  the 
allowances  to  shippers  for  services. 

(j)  It  extended  the  operation  of  the  act  to  express 
and  sleeping  car  companies  and  to  pipe  lines. 

(k)  It  increased  the  membership  and  salaries  of 
the  commissioners. 

(1)  It  gave  the  courts  additional  powers  to  issue 
mandamus. 

{m)  It  introduced  a  provision  making  carriers, 
parties  to  through  transportation,  liable  for  losses  be- 
yond their  own  lines,  and  forbidding  limitation  of  lia- 
bihty. 

(n)  It  regulated  the  methods  for  enforcing  the  or- 
ders of  the  commission. 

(o)  It  introduced  regulations  governing  suits  to 
set  aside  or  suspend  orders  of  the  commission, 

(p)  It  introduced  provisions  regarding  the  reports 
and  accounts  to  be  furnished  by  carriers  to  the  com- 
mission. 

Purposes  of  the  Act. 

It  is  obvious  that  the  purpose  for  which  the  Act  to 
Rebate  Commerce  was  passed  was  to  remedy  the 


INTERSTATE  COMMERCE  REGULATION  259 

recognized  evils  and  abuses  in  the  operation  of  the  rail- 
roads in  the  United  States.  These  evils  included  the 
exaction  of  excessive  charges  to  or  from  non-competi- 
tive points ;  preference  in  rates  and  consequent  building 
up  of  certain  favored  localities  at  the  expense  of  out- 
lying points;  and  especially  the  allowance  of  special 
facilities  and  concessions  in  rates  to  large  and  power- 
ful shippers,  enabling  them  to  drive  their  weaker  com- 
petitors to  the  wall. 

In  its  second  annual  report  the  Interstate  Commerce 
Commission  said:  "The  purpose  of  the  Act  to  Regu- 
late Commerce  may  be  summed  up  in  a  single  phrase; 
it  is  to  bring  the  railroads  of  the  country  under  the 
control  of  law  representing  an  enlightened  public 
opinion." 

In  his  decision  of  the  case  Re  Chicago,  St.  P.  &  K.  C. 
R.  Co.  (2  I.  C.  C.  Rep.  231,  259)  Chairman  Cooley  of 
the  Commission  said:  "As  a  matter  of  public  history 
nothing  can  be  more  notorious  than  that  the  Act  to 
Regulate  Commerce  had  for  its  leading  and  general 
purpose,  to  which  other  purposes  were  subordinate,  to 
provide  effectual  securities  that  the  general  public,  in 
making  use  of  the  means  of  railroad  transportation 
provided  by  law  for  their  service,  should  have  the  bene- 
fits which  the  law  had  undertaken  to  give,  but  of  which 
in  very  many  cases  it  was  found  the  parties  entitled 
to  them  were  deprived  by  the  arbitrary  conduct,  the 
favoritism,  or  the  unreasonable  exactions  of  those  who 
managed  them.  It  may  be  affirmed  with  entire  confi- 
dence that  the  act  was  not  passed  to  protect  railroad 
corporations  against  the  misconduct  or  the  mistakes  of 


260  INTERSTATE  COMMERCE  REGULATION 

their  officers,  or  even  primarily  to  protect  such  corpora- 
tions against  each  other.  .  .  .  Everywhere  in  the 
act  the  primary  purpose  apparent  in  its  provisions  is 
that  individuals  dealing  in  matters  of  transportation 
with  the  carriers  regulated  by  it  shall  not,  in  respect 
to  the  conveniences  the  carriers  are  supposed  to  offer 
to  the  pubhc,  be  wronged  by  arbitrary  conduct  or  by 
favoritism,  or  be  subjected  to  extortion," 

And  Mr.  Justice  White,  of  the  United  States  Su- 
preme Court,  in  the  case  of  New  York,  N.  H.  &  H.  R. 
Co.  vs.  I.  C.  C.  (200  U.  S.  361),  said:  "It  cannot  be 
challenged  that  the  great  purpose  of  the  Act  to  Regu- 
late Commerce,  whilst  seeking  to  prevent  unjust  and 
unreasonable  rates,  was  to  secure  equality  of  rates  as 
to  all  and  to  destroy  favoritism,  these  last  being  accom- 
plished by  requiring  the  publication  of  tariffs  and  by 
prohibiting  secret  departures  from  such  tariffs,  and 
forbidding  rebates,  preferences  and  all  other  forms  of 
undue  discrimination.     ... 

"If  the  public  purpose  which  the  statute  was  intended 
to  accomplish  be  borne  in  mind,  its  meaning  becomes, 
if  possible,  clearer.  What  was  that  purpose  ?  It  was  to 
compel  the  carrier  as  a  public  agent  to  give  equal  treat- 
ment to  all." 

Main  Provisions  of  the  Law. 

As  now  amended,  the  main  provisions  of  the  Inter- 
state Commerce  Law  have  been  summarized  by  Pro- 
fessor Emory  R.  Johnson  as  follows: 

1.  The  law  applies  to  passenger  and  freight  traffic 
carried  by  railways  or  by  a  joint  rail  and  water  route; 


INTEKSTATE  COMMERCE  REGULATION  261 

to  express  and  sleeping  car  companies;  to  pipe  lines, 
and  to  private  car  lines.  It  does  not  apply  to  the 
traffic  carried  upon  all-water  routes. 

2.  It  is  made  unlawful  to  charge  extortionate  rates 
or  those  which  unjustly  discriminate  between  places, 
persons  or  commodities.  Free  passes  are  prohibited, 
and  railway  companies  are  not  allowed  to  be  producers 
of  any  commodities  they  carry,  with  the  exception  of 
lumber. 

3.  It  is  unlawful  for  a  carrier  to  "receive  any 
greater  compensation  in  the  aggregate  for  the  trans- 
portation of  passengers  or  like  kinds  of  property,  under 
substantially  similar  circumstances  and  conditions,  for 
a  shorter  than  for  a  longer  distance  over  the  same  line, 
in  the  same  direction,  the  shorter  being  included  within 
the  longer  distance."  But  the  Commission  has  power 
to  suspend  the  enforcement  of  this  provision  in  the  case 
of  carriers  that  have  to  meet  exceptional  conditions  of 
competition.  This  is  known  as  the  "long-and-short- 
hauF'  clause. 

4.  Railways  are  not  allowed  to  pool  their  freight 
traffic  or  the  earnings  from  their  freight  or  oassenger 
business. 

5.  All  railroad  rates  and  fares  must  be  printed  and 
filed  with  the  Interstate  Commerce  Commission.  No 
rates  can  be  put  into  force  until  30  days  after  they 
have  been  ffied,  nor  can  they  be  changed  except  upon 
30  days'  notice  to  the  Commission,  unless  the  Commis- 
sion gives  permission  to  the  carriers  to  change  the  rates 
in  less  than  30  days. 

6.  The  penalty  for  \Hiolating  the  act  is  a  fine  of 


262  INTERSTATE  COMMERCE  REGULATION 

$5,000  for  each  offense.  If  the  offense  be  an  unlawful 
discrimination  in  rates  or  charges,  this  penalty  may  be 
increased  by  imprisoning  the  guilty  officials  for  a  term 
not  exceeding  two  years,  and  the  offending  corporations 
may  be  subjected  to  a  fine  of  $1,000  to  $2,000  for  each 
day  during  which  the  offense  is  committed. 

7.  The  administration  and  enforcement  of  the  act 
is  intrusted  to  an  Interstate  Commerce  Commission  of 
seven  members.  One  member  is  appointed  each  year 
for  the  term  of  seven  years  at  a  salary  of  $10,000  per 
annum.  The  principal  office  of  the  Commission  is  in 
Washington,  D.  C. 

8.  The  Commission  has  the  power  to  investigate 
the  railways  either  upon  complaint  or  upon  its  own 
motion.  The  Commission  cannot  prescribe  rates;  but, 
upon  complaint  and  after  investigation,  it  can  require 
the  carriers  to  change  the  fares  or  rates  that  have  been 
found  to  be  unreasonable.  The  equity  of  the  Commis- 
sion's order  as  to  rates  can  be  tested  in  a  Federal  court 
by  formal  proceedings  instituted  by  the  carriers. 

9.  Carriers  must  obey  the  orders  of  the  Commission 
within  30  days,  unless  the  carriers  can  secure  from  a 
Federal  court  an  injunction  suspending  or  annulling 
the  Commission's  order. 

10.  Railways  subject  to  the  act  must  make  monthly 
reports  to  the  Commission  regarding  accidents,  oper- 
ating revenues,  and  expenses;  and  must  submit  an  an- 
nual report  containing  detailed  information  concerning 
practically  every  phase  of  their  operations  and  finances. 

11.  All  the  accounts  kept  by  railway  companies 
must  be  in  accordance  with  a  uniform  system  pre- 


INTERSTATE  COMMERCE  REGULATION  263 

scribed  by  the  Commission,  which  has  the  power  to 
inspect  the  books  of  the  railways,  and  thus  to  enforce 
its  system  of  uniform  accounting. 

Powers  of  the  Commission. 

In  the  great  task  of  regulating  the  railways  the  In- 
terstate Commerce  Commission  proceeds  by  virtue  of 
three  general  classes  of  powers: 

First,  the  power  of  investigation.  The  operations  of 
the  interstate  railways  are  now  public.  Their  practices 
are  known  to  the  Commission,  and  abuses,  when  known, 
can  be  corrected. 

Second,  the  Commission  has  the  power  to  adjust  rates 
and  fares — not  merely  to  investigate  them,  but  to  cor- 
rect them.  This  is  of  the  utmost  importance  to  the 
people  of  the  United  States,  by  securing  the  equitable 
adjustment  of  railway  charges  among  competing  lo- 
calities. 

Third,  the  Commission  has  the  power  to  regulate  the 
services  and  accounts  of  the  carriers.  It  is  thus  enabled 
to  exercise  a  direct  influence  for  the  public  good  upon 
the  management  of  railway  companies.  Its  powers  in- 
clude the  supervision  of  safety  appliances,  block  sig- 
naling and  train  control  on  all  railroads  in  the  United 
States.  This  increases  the  safety  of  travel  and  the  gen- 
eral efficiency  of  the  passenger  and  freight  services 
throughout  the  country. 

The  past  decade  has  witnessed  a  vast  change  in  public 
sentiment  regarding  the  regulation  of  the  railroads, 
and  at  the  present  time  (1916)  the  work  of  the  Inter- 


264  INTERSTATE  COMMERCE  REGULATION 

state  Commerce  Commission  is  strongly  supported  by- 
enlightened  public  opinion. 

Since  the  enactment  of  the  interstate  commerce  laws 
the  meaning  of  practically  every  section  has  been  passed 
upon  by  decisions  of  the  Federal,  district,  appellate  and 
Supreme  Courts ;  and  while  the  scope  of  these  laws  has 
been  narrowed  in  many  instances,  it  has  been  widened 
in  others  by  judicial  interpretation. 

Interstate  Commerce  Decisions. 

Just  as  the  State  courts  may  pass  upon  the  reason- 
ableness of  the  rates  charged  by  the  railways  upon 
traffic  moved  entirely  within  the  State,  so  the  United 
States  courts  are  empowered  to  determine  the  reason- 
ableness of  rates  fixed  by  the  railroads  upon  interstate 
traffic,  and  may  also  pass  upon  the  constitutionality  of 
charges  fixed  by  Congress,  by  the  Interstate  Commerce 
Commission,  by  State  legislatures,  and  by  State  rail- 
road commissions.  The  courts  may  also  be  appealed 
to  for  injunctions  to  prevent  carriers  from  charging  ex- 
tort ionately  high,  or  destructively  low,  rates. 

Some  of  the  more  important  decisions  in  interpreta- 
tion of  the  interstate  commerce  laws  may  be  briefly 
summarized  here. 

1.  The  present  tendency  of  the  courts  is  to  give  the 
act  a  broad  construction.  According  to  Mr.  Justice 
White,  "the  statute  was  remedial  and  is  therefore  en- 
titled to  receive  that  interpretation  which  reasonably 
accomplishes  the  great  public  purpose  which  it  was  en- 
acted to  subserve." 


INTERSTATE  COMMERCE  REGULATION  265 

2.  The  act  did  not  create  new  powers  in  any  rail- 
roads, but  simply  regulated  those  already  existing. 
Where,  therefore,  one  road  had  by  agreement  allowed 
another  to  run  trains  over  its  tracks  with  the  proviso 
that  the  latter  should  do  no  local  business,  the  Com- 
mission refused  to  require  the  stoppage  of  its  trains  at 
local  stations,  on  complaint  of  discrimination  against 
such  stations.     (Alford  vs.  Chicago,  R.  I.  &  P.  R.  Co.) 

3.  The  act  deals  only  with  the  obligations  of  the  car- 
riers as  common  carriers,  and  in  no  way  regulates  or 
interferes  with  matters  not  involving  their  duty  to 
shippers  or  passengers  as  such.  For  instance,  it  does 
not  prevent  a  railroad  from  leasing  all  its  refrigerator 
cars  from  one  individual  or  company,  though  the  latter 
be  a  large  shipper  in  addition  to  being  a  lessor  of  such 
cars.     (9  I.  C.  C.  Rep.  182.) 

4.  It  is  the  carriers'  duty  under  the  law  to  provide 
adequate  service,  including  refrigeration  and  similar  fa- 
cilities; also  through  routes,  joint  rates,  and  switch  con- 
nections. 

5.  When  a  shipment  between  points  in  the  same 
State  proceeds  over  a  line  which  passes  en  route  through 
another  State,  this  is  interstate  commerce  subject  to 
the  act.  (2  I.  C.  C.  Rep.  375,  386.)  The  same  rule 
would  probably  hold  in  case  of  a  shipment  through  the 
United  States  from  one  foreign  country  to  another. 

6.  The  act  does  not  apply  to  a  discrimination  be- 
tween two  Canadian  points  on  shipments  into  the  United 
States.     (10  I.  C.  C.  Rep.  217.) 

7.  The  act  applies  to  street  railways  and  to  electric 
railroads,  but  not  to  omnibus  companies,  or  to  wagon 


266  INTERSTATE  COMMERCE  REGULATION 

and  team  traffic,  even  where  the  teams  are  controlled 
by  a  railroad. 

8.  "A  joint  rate  is  a  rate  over  a  through  route,  every 
part  of  which  has  been  made  by  express  agreement  be- 
tween the  carriers  making  the  through  route." 

9.  Under  the  act  it  is  not  sufficient  that  a  rate  be 
not  extortionate;  it  must  also  be  relatively  fair  and 
just  with  reference  to  other  rates.  (1  I,  C.  C.  Rep. 
215.) 

10.  Both  the  cost  of  the  service  to  the  carrier  and 
the  value  of  the  service  to  the  shipper  enter  into  the 
determination  of  practically  all  rates,  and  a  rate  must 
be  considered  from  both  points  of  view.  The  carrier 
cannot  charge  exorbitant  rates,  though  the  traffic  will 
stand  such  rates;  nor  can  it  be  required  to  haul  goods 
at  a  loss  merely  because  the  traffic  will  not  bear  remun- 
erative rates.  The  rate  must  be  adjusted  within  these 
two  extremes.     (4  I.  C.  C.  Rep.  588,  etc.) 

11.  "A  reasonable  rate  is  one  that  will  make  just 
and  fair  return  to  the  carrier  when  it  is  charged  to  all 
who  are  to  pay  it  without  unjust  discrimination  against 
any,  and  when  the  revenue  it  produces  is  subject  to  no 
improper  reductions."  (4th  Annual  Report  of  the 
Commission.) 

12.  "What  the  company  is  entitled  to  ask  is  a  fair 
return  upon  the  value  of  that  which  it  employs  for  the 
public  convenience."  The  test  is  not  the  amount  spent 
by  the  railroad,  but  the  value  of  what  is  used  for  the 
public  benefit.  Extravagant  management  is  therefore 
no  excuse  for  high  rates.  When  a  rate  yields  a  reason- 
able return  on  capital  invested,  the  railroads  are  not 


INTERSTATE  COMMERCE  REGULATION  267 

justified  in  increasing  it  merely  because  additional  rev- 
enue is  needed.     (10  I.  C.  C.  Rep.  548.) 

13.  While  under  ordinary  circumstances  a  rate 
should  increase  with  the  distance,  this  is  true  only  of 
the  total  rate,  and  it  is  firmly  established,  as  a  general 
rule,  that  the  rate  per  ton-mile  should  decrease  as  the 
distance  increases.  The  rule  has  been  thus  stated  by 
Commissioner  Morrison:  "It  is  as  nearly  settled  as  any- 
thing relating  to  railroad  charges  can  be,  that  under  like 
conditions  freight  can  be  profitably  carried  long  dis- 
tances at  rates  proportionately  lower  than  short  dis- 
tances." 

14.  A  rate  in  a  direction  in  which  there  is  a  preva- 
lence of  empty  cars  may  properly  be  lower  than  in  the 
opposite  direction,  in  which  cars  are  scarce.  This  con- 
sideration is  often  the  logical  explanation  of  differences 
between  east-bound  and  west-bound  rates. 

15.  Rates  through  a  sparsely  settled  country  are 
properly  higher  than  those  through  a  region  where  the 
volume  of  the  traffic  is  greater,  and  as  a  general  rule  an 
increase  of  tonnage  should  result  in  a  lowering  of  rates. 
(4  I.  C.  C.  Rep.  48,  72.)  This  principle,  however,  is 
not  always  applicable  to  freight  rates.  The  Commis- 
sion would  probably  refuse  to  sanction  a  lower  rate  be- 
cause of  increased  volume  of  traffic  for  a  specific  indi- 
vidual or  locality,  but  would  favor  such  where  it  inured 
to  the  benefit  of  all  shippers  alike. 

16.  Where  the  value  of  an  article  enters  into  the  de- 
termination of  the  proper  rate  to  be  charged  for  its 
transportation,  the  market  value  is  the  test,  and  not  the 
intrinsic  value.     If  the  shipper  advertises  and  sells  a 


268  INTERSTATE  COMMERCE  REGULATION 

commodity  as  an  expensive  article,  the  carrier  is  entitled 
to  transport  it  as  such.     (4  I.  C.  C.  Rep.  32,  38.) 

17.  The  Supreme  Court  having  held  that  competi- 
tion between  carriers  subject  to  the  act  justifies  rate 
preferences  between  localities,  the  Commission  recog- 
nizes that  a  competitive  point  may  properly  be  allowed 
better  rates  than  a  non-competitive  one,  provided  the 
rates  allowed  the  former  are  remunerative  and  those  to 
the  latter  are  not  "unreasonable  per  se" — that  is,  when 
they  yield  no  more  than  a  reasonable  return  to  the 
carrier  for  the  service  rendered.  Competition  among 
carriers,  however,  does  not  justify  rate  discriminations 
among  individuals,  but  only  preferences  among  locali- 
ties. 


The  above  summary  of  a  few  of  the  decisions  of  the 
Interstate  Commerce  Commission  which  have  been  sup- 
ported by  the  courts  in  their  interpretation  of  the  law, 
are  sufficient  to  indicate  the  value  to  the  public  of  the 
Act  to  Regulate  Commerce,  and  the  efforts  made  by 
the  Commission  to  enforce  the  law  in  the  public  in- 
terest. 


TRANSPORTATION 

BY 

WATER 


"It  is  my  conviction  that  a  deep  waterway  across  the 
State  of  Illinois  would  be  worth  all  it  could  possibly 
cost,  within  the  limits  of  the  most  liberal  estimates  which 
has  ever  been  placed  upon  it,  even  were  there  no  Missis- 
sippi to  receive  its  affluent  waters,  and  no  hope  of  ever 
floating  a  craft  beyond  the  line  which  limits  the  sover- 
eignty of  the  commonwealth.'* — I  sham  Randolph,  Chief 
Engineer  Chicago  Sanitary  District. 


CHAPTER  XVIII. 

TRANSPORTATION  BY  WATER. 

Traffic  moving  by  water  consists  almost  entirely  of 
passenger  and  freight  business.  The  domestic  express 
business  by  water  routes  is  negUgible,  and  the  only 
domestic  movement  of  mail  is  on  local  routes  of  slight 
importance.  Since  the  advent  of  railroads  the  impor- 
tance of  passenger  traffic  on  water  routes  has  greatly 
dechned,  especially  on  inland  streams,  while  on  State 
and  private  canals  this  traffic  has  practically  disap- 
peared. On  the  Ohio  and  Mississippi  rivers  the  through- 
passenger  business,  once  so  famous,  no  longer  exists, 
and  while  some  packet  hnes  there  are  still  actively  en- 
gaged in  the  transportation  of  passengers,  this  traffic 
is  limited  in  the  main  to  local  movements  or  to  the  excur- 
sion business,  and  as  a  whole  is  of  very  small  importance. 

Large  Business  on  Scenic  Routes. 

On  other  routes  the  situation  is  different.  On  tidal 
streams  connected  with  ocean  routes,  or  where  scenic 
attractions  offer  popular  routes,  such  as  the  Hudson, 
Potomac,  St.  Johns  and  Columbia  rivers,  the  passenger 
business  still  thrives  to  a  considerable  extent.  In  like 
manner  finely  equipped  lines  of  passenger  vessels  use 
Long  Island  Sound,  Chesapeake  Bay,  and  the  Great 
Lakes  and  their  connecting  channels. 

A  considerable  passenger  business  is  also  done  by 
coastwise  lines.    From  New  York  and  from  other  ports 

271 


272  TRANSPORTATION    BY    WATER. 

on  the  North  Atlantic  passenger  steamers  move  to 
every  port  of  importance  on  the  Atlantic  and  Gulf 
coasts  and  also  to  the  British  maritime  provinces  and  the 
West  Indies,  to  Mexican  and  Central  and  South  Amer- 
ican ports,  not  to  mention  the  trans- Atlantic  movement 
to  European  ports.  On  the  Pacific  coast  several  pas- 
senger lines  connect  San  Francisco  with  other  Pacific 
coast  ports  in  California,  Oregon  and  Washington,  as 
well  as  with  ports  in  Alaska,  Hawaii,  and  the  Canal 
Zone,  British  Columbia,  and  Mexican  and  Central 
American  ports.  Many  of  the  coastwise  passenger  ves- 
sels are  of  excellent  efficiency  and  equipment. 

Official  Figures  of  Passenger  Traffic. 

The  total  movement  of  passengers  by  water  in  a  year 
is  indicated  in  the  following  table  from  the  United 
States  Census  Report  on  Transportation  by  Water: 

Ferry  All  other 

Division.                                       passengers,  passengers.  Total. 

Atlantic  and  Gulf  coasts 272,596,670  19,958,746  292,555,416 

Pacific  coast  (including  Alaska) 39,532,354      4,657,617  44,189,971 

Great  Lakes  and  St.  Lawrence  river. . .     8,264,482       5,815,664  14,080,146 

Mississippi  river  and  tributaries 10,022,612       4,099,629  14,122,241 

Other  inland  waters 321,521       1,556,368  1,877,889 

Total 330,737,639    36,088,024    366,825,663 

It  will  be  noted  that  nine-tenths  of  the  total  number 
of  passengers  were  carried  by  ferryboats,  a  distinctly 
local  movement.  The  total  of  water-borne  passengers 
by  other  than  ferryboats  is  less  than  one-twentieth  of 
the  total  number  of  passengers  carried  by  railroad. 

The  Atlantic  and  Gulf  coasts  constitute  by  far  the 
most  important  district  in  the  number  of  passengers 
carried.    The  Great  Lakes  rank  second,  but  their  pas- 


TRANSPORTATION    BY    WATER.  278 

senger  traffic  is  not  much  in  excess  of  the  Pacific  coast 
or  the  river  movement.  In  all  of  the  great  divisions  the 
late  statistics  show  a  considerable  increase  of  traffic 
over  1889.  This  is  most  notable  in  the  Great  Lakes 
(260.7  per  cent)  and  the  Pacific  coast  (237.5  per  cent). 
On  the  Atlantic  and  Gulf  coasts  and  the  rivers,  the  in- 
crease for  this  period  was  about  72  per  cent  for  each 
of  these  districts. 

Movement  of  Freight  TraflSc. 

Freight  may  be  readily  divided  into  two  main  classes 
— package  freight  and  bulk  freight.  Package  freight 
includes  all  kinds  of  general  merchandise  and  manufac- 
tured goods  usually  carried  in  bags,  boxes,  barrels,  and 
other  packages.  Freight  of  this  description  moves  over 
every  natural  and  artificial  waterway  of  any  importance. 
The  principal  movements  of  package  freight,  however, 
are  between  New  England  ports  and  the  port  of  New 
York,  between  the  various  North  and  South  Atlantic 
and  Gulf  ports,  and  the  movement  on  the  Great  Lakes 
and  on  the  Pacific  coast. 

Bulk  freight  includes  coal,  iron  ore,  lumber,  grain, 
oil,  stone,  and  farm  products,  which  are  generally 
shipped  in  bulk  and  to  a  large  extent  in  cargo  lots. 

More  in  detail  freight  may  be  classified  as  follows: 
Minerals  (anthracite  coal,  bituminous  coal,  ores,  stone, 
sand,  etc.) ;  mineral  products  (petroleum  and  other  oils, 
ice,  cement,  lime,  phosphate  and  fertilizer,  pig  iron  and 
steel  rails,  etc.) ;  forest  products  (logs,  piling,  cross-ties, 
lumber,  naval  stores,  etc.)  ;  agricultural  products  (grain, 
hay,  cotton,  fruits,  vegetables  and  tobacco) ;  fish,  oysters, 

I.B.L.     Vol.  8—19 


274  TRANSPORTATION    BY    WATER. 

and  Kve  stock;  miscellaneous  (commodities  not  included 
in  any  of  the  above  classes) . 

Need  of  Water  Transportation. 

In  an  official  report  Mr.  Herbert  Knox  Smith,  Com- 
missioner of  Corporations,  says: 

"Our  increasing  commerce  demands  that  our  water- 
ways shall  be  made  an  active  part  of  our  transportation 
system.  Our  inland  rivers  are  not  so  now.  Waterways 
themselves  and  their  conditions  must  be  so  improved 
that  they  shall  carry  a  share  of  the  nation's  traffic  pro- 
portioned to  their  real  possibilities,  and  shall  so  supple- 
ment the  rail  system  as  to  prevent  the  recurrence  of  dis- 
astrous traffic  congestions.  Waterway  traffic  has  its 
inexorable  limitations.  Waterways  also  have  their  enor- 
mous possibilities.  If,  guided  by  the  facts,  we  direct 
our  attention  to  those  lines  of  effort  where  success  is 
possible,  we  shall  utihze  these  possibilities." 

Our  coast  line  is  over  5,700  miles,  or,  with  the  inden- 
tations of  the  coast,  over  64,000  miles.  The  Great  Lakes 
shore  line  of  the  United  States  is  2,760  miles,  or,  with 
the  indentations,  4,329.  These  lakes  are  connected  with 
each  other,  and  by  canals  with  the  Atlantic  Ocean,  St. 
Lawrence  River,  and  the  Mississippi  River,  there  being, 
however,  a  channel  of  but  14  feet  feet  depth  to  the  St. 
Lawrence,  and  this  through  Canadian  territory,  7  feet 
to  the  Atlantic  through  the  Erie  Canal,  and  a  still  less 
depth  to  the  Mississippi. 

Mileage  of  Available  Routes. 

There  are  over  290  streams  in  the  country  used  to  a 
substantial  degree  for  navigation,  with  an  approximate 


TRANSPORTATION    BY    WATER.  275 

navigable  mileage  of  26,400,  but  with  very  little  direct 
connection  with  each  other  except  the  Mississippi  system. 
About  4,500  miles  of  canals  have  been  constructed. 
More  than  one-half — 2,444  miles,  costing  over  $80,000,- 
000 — ^has  been  abandoned.  State  canals,  however,  still 
operate  in  New  York,  Ohio,  Illinois,  and  Louisiana,  with 
a  total  mileage  of  nearly  1,360,  and  there  are  also  16 
private  canals  of  some  importance  in  operation,  with  a 
total  mileage  of  632. 

Defects  of  Present  System. 

Transportation  by  water  now  suffers  from  one  far- 
reaching  disadvantage  which  we  can  largely  remedy, 
namely,  the  lack  of  organization  of  our  waterway  sys- 
tem as  a  whole.  At  present  we  can  hardly  be  said  to 
have  a  general  waterway  system.  Our  great  total  mile- 
age of  waterways  is  split  up  by  certain  physical  charac- 
teristics into  a  number  of  largely  unrelated  parts.  Part 
of  the  waterways  consists  of  ocean  routes  of  unrestricted 
depth  and  width.  Part  consists  of  lake  routes  of  un- 
restricted depth  except  in  certain  very  important  con- 
necting channels.  The  rest  consists  of  river  and  canal 
channels  of  varying  and  always  restricted  depth,  of 
narrow  width,  devious  courses,  and  with  more  or  less 
current  and  obstructions.  Most  of  the  rivers  are  navi- 
gable at  present  only  for  light-draft  boats.  At  ordinary 
stages  of  water  about  40  streams  have  a  total  of  at  least 
2,600  miles  of  10-foot  navigation;  70  streams,  including 
parts  of  some  of  the  40  mentioned,  give  about  3,200  miles 
additional  from  6  to  10  feet,  a  total  of  5,800  miles  of  river 
navigation  of  6  feet  and  over.  But,  again,  these  totals 
do  not  mean  that  there  are  any  such  continuous  stretches 


276  TRANSPORTATION    BY    WATER. 

of  inland  waterways  of  these  respective  depths.  Very- 
few  of  the  Atlantic  rivers  have  more  than  100  miles  of 
a  depth  of  6  feet.  The  Mississippi  system  has  about 
2,500  miles  of  6-foot  navigation. 

Lack  of  Continuous  Routes. 

Our  canals  also  are  largely  disconnected  with  one  an- 
other, and  of  varying  depths.  Excluding  the  short  gov- 
ernment canals  like  the  St.  Marys  Falls  Canal,  there 
are  13  miles  of  canals  in  operation  with  10  feet  depth, 
about  1,200  miles  of  6  to  10  feet  (mostly  6),  and  about 
750  miles  of  4  to  6  feet  depth. 

Interior  waterways  are  indeed  largely  disconnected. 
But  added  to  this  is  also  a  great  difference  in  vessels 
using  them,  so  that  they  are  not  generally  "interchange- 
able" over  different  waterways.  For  example,  on  the 
Mississippi  the  shallow  depth  and  the  constant  backing 
and  turning  at  the  innumerable  bends  make  the  stern- 
wheel  paddle  the  only  method  generally  successful ;  and, 
on  the  other  hand,  this  latter  is,  of  course,  wholly  un- 
suited  for  the  open  sea.  Again,  naval  architects  assert 
that,  even  were  the  large  bulk  freighters  of  the  lakes 
brought  to  tidewater  it  would  be  preferable,  and  almost 
necessary,  to  tranship  there;  that  these  freighters  are 
not  adapted  to  ocean  conditions. 

Character  of  Vessels  Engaged. 

Vessels  differ  still  further  according  to  the  nature  of 
the  freight.  Many  are  adapted  for  a  given  traffic  only. 
There  are  grain,  ore,  coal,  fruit,  lumber  and  oil  vessels. 
This  applies  especially  to  bulk  freight.  Much  more  than 
three-fourths  of  the  traffic  on  the  Mississippi  system  is 


TRANSPORTATION    BY    WATER.  277 

carried  in  bulk  by  barges  and  rafts.  Over  80  per  cent 
of  the  Great  Lakes  business  is  bulk  traffic.  A  very  im- 
portant part  of  the  coastwise  traffic,  especially  coal,  is 
bulk  cargo. 

A  great  part  of  the  traffic  is  through  freight.  Our 
waterways  are  now  divided  by  differences  in  channels, 
etc.,  and  by  diversity  in  floating  equipment.  The  rail 
system  of  the  country  is  standardized,  physically  unified, 
and  its  control  is  largely  centralized.  It  is  well  adapted 
to  handle  such  through  freight.  A  share,  at  least,  of 
this  through  freight  is  essential  for  the  success  of  either 
system.  There  has  been  bitter  competition  between 
rail  and  river  lines.  But  the  inland  water  system,  di- 
vided and  disorganized  by  the  conditions  described,  is 
greatly  handicapped,  especially  as  to  through  traffic. 

What  Should  Be  Done. 

Under  a  general  plan,  inland  waterways  can  be  made 
much  more  of  a  commercial  unit.  They  must  be  placed 
in  such  a  position  that  they  can  secure,  even  against 
rail  competition,  a  far  greater  proportion  than  now  of 
the  traffic.  River  and  canal  traffic  is  insignificant  as  com- 
pared with  rail  traffic. 

We  must,  of  course,  recognize  that  no  reasonable  ex- 
penditure will  wholly  remove  these  difficulties.  For  in- 
stance, it  is  probable  that  transshipment  from  rail  to 
water,  or  from  one  water  carrier  to  another,  will  con- 
tinue to  be  necessary  on  most  long  inland  or  partly 
inland  hauls.  Transshipment  means  terminals.  It  is 
sufficient  to  say  now  that  terminal  improvement  is 
greatly  needed  and  is  entirely  possible. 


278  TRANSPORTATION    BY    WATER. 

Policy  of  Federal  Improvement. 

Since  1870  a  general  policy  of  Federal  waterway 
improvement  has  been  followed.  The  total  Federal  ap- 
propriations for  inland  river  improvements  up  to  1915 
have  been  over  $350,000,000.  There  has  been  very  little 
co-operation  between  the  central  and  local  authorities. 
This  has  resulted  in  inevitable  lack  of  uniformity  and 
of  comprehensive  plan,  and  in  the  lack  of  any  propor- 
tionate contribution  from  the  localities  peculiarly  bene- 
fited. European  countries  have  in  many  cases  distribu- 
ted the  costs  of  waterway  improvements  upon  localities 
in  some  ratio  with  the  special  benefits  received.  Such 
co-operation  is  worthy  of  careful  consideration  in  any 
comprehensive  plan  of  waterway  improvement. 

The  total  gross  tonnage  of  documented  vessels  in  the 
domestic  trade  in  1896  was  3,858,927  tons;  in  1915,  6,- 
818,363  tons,  a  gain  of  76  per  cent.  American  vessels 
in  the  foreign  trade,  whose  tonnage  reached  its  maxi- 
mum in  1860,  declined  until  1898.  Between  1896  and 
1915  there  was  an  increase  of  only  25  per  cent  in  this 
latter  tonnage. 

Corporations  Are  Largely  Interested. 

Corporations  control  the  great  proportion  of  the 
steam  tonnage,  particularly  the  larger  vessels.  Recently 
the  average  size  of  vessels  owned  by  individuals  was 
113  tons ;  by  firms,  223 ;  and  by  corporations,  526.  There 
was  also  a  proportionate  increase  of  corporate  owner- 
ship of  barge  lines,  and  even  of  sailing  vessels,  though 
not  so  marked  as  with  steamers.  There  has  been  a 
recent  tendency  toward  consolidation  of  many  lines 
under  single  corporations. 


TRANSPORTATION    BY    WATER.  279 

Returns  as  to  earnings  and  expenses  were  highly  un- 
satisfactory. Only  a  few  rough  conclusions  can  be  drawn 
therefrom.  Operating  expenses  averaged,  for  the  com- 
panies making  returns,  about  80  per  cent  of  the  gross 
earnings,  the  lowest  ratio  of  operating  cost  being  that 
of  the  bulk-cargo  vessels  of  the  Great  Lakes.  The  high- 
est ratio  is  that  of  the  packet  lines  on  the  Mississippi 
system  and  southern  rivers. 

Marine  insurance  rates  on  river  traffic  reflect  in  a 
striking  way  the  differences  in  waterway  improvement, 
navigability,  and  dangers.  The  cost  of  cargo  insurance 
is  often  a  determining  factor  as  between  rail  and  water 
shipments,  especially  on  rivers. 

Nature  of  Government  Work. 

Canals  owned  by  the  Government  form  links  in 
through  water  routes,  such  as  the  St.  Marys  Falls  Canal, 
rather  than  distinct  routes  in  themselves.  The  improve- 
ment of  rivers  by  the  Government  has  consisted  in  the 
removal  of  obstructions  to  navigation,  the  deepening 
of  channels,  the  construction  of  revetments,  and  the  de- 
velopment of  slack-water  navigation  by  the  building  of 
locks  and  dams  for  the  purpose  of  maintaining  a  proper 
depth.  Such  improvements  have  been  carried  out  to 
some  extent  on  most  of  the  navigable  streams  of  the 
country,  the  most  comprehensive  and  connected  system 
of  river  improvement  being  that  of  the  Mississippi  and 
some  of  its  important  tributaries. 

A  Question  of  Economy. 

Since  such  a  large  portion  of  our  traffic  is  long-dis- 
tance, and  will  thus  involve  transshipment,  the  question 


280  TRANSPORTATION    BY    WATER. 

of  the  future  development  of  our  inland  waterways  re- 
solves itself  into  one  of  relative  operating  expenses  and 
of  investments  of  capital.  There  is  Uttle  doubt  that  for 
a  given  distance  a  continuous  water  haul  in  a  boat  of 
even  moderate  size  is,  and  will  continue  to  be,  cheaper 
in  operating  costs  alone  than  a  similar  continuous  rail 
haul.  If  the  channels  are  made  deep  enough  to  permit 
the  use  of  relatively  large  boats,  this  greater  cheapness 
will,  in  some  cases,  be  sufficient  to  cover  also  the  addi- 
tional cost  of  transshipment.  The  question  is,  however, 
whether  besides  doing  so  it  will  afford  enough  saving 
to  cover  reasonable  interest  on  the  investment  in  water- 
ways and  water  terminals  necessary  to  secure  such 
measure  of  efficiency.  This  is  a  question  which  can  only 
be  answered  after  most  exhaustive  engineering  estimates 
of  the  cost  of  constructing  waterways  of  different  depths 
and  most  thorough  investigations  of  operating  expenses 
of  different  kinds  and  sizes  of  vessels,  in  comparison 
with  expenses  of  rail  transportation. 

Railways  at  their  Limit. 

It  should  be  noted,  however,  in  considering  how  far 
expenditures  of  capital  for  improved  water  routes  are 
advisable,  that  in  some  cases  the  railroads  have  already 
reached  the  limit  of  their  carrying  capacity  and  that 
they  will  have  to  make  additional  investments  of  capital 
if  they  are  to  meet  the  demands  of  transportation.  The 
relative  amount  of  investment  necessary  thus  to  increase 
the  facilities  of  the  railroads,  as  compared  with  the  in- 
vestment necessary  to  afford  adequate  water  routes  and 
terminals,  must  therefore  likewise  be  taken  into  account. 


TRANSPORTATION    BY    WATER.  281 

Shipping  Contracts  and  Documents. 

Transportation  by  water  is  the  oldest  method  of  long- 
distance traffic.  It  is  in  large  measure  governed  by  a 
body  of  world-wide  maritime  usages  of  remote  origin. 
These  customs  have,  however,  been  modified  by  statute, 
especially  since  the  development  of  inland  navigation 
and  its  closer  connection  with  railroads.  Various  ports 
also  have  local  rules. 

In  securing  cargoes,  regular  steamship  lines,  like  rail- 
roads, make  use  of  traffic  agents  of  their  own,  but  in  the 
case  of  bulk  cargoes  and  "tramp"  vessels  ship  brokers, 
acting  for  both  parties,  are  often  employed. 

Charters  and  Bills  of  Lading. 

The  vessel  may  be  let  or  hired  by  a  charter,  or  the 
vessel  may  have  a  regular  route,  its  owner  or  operator 
accepting  shipments  as  a  common  carrier,  in  which  case 
it  is  technically  known  as  a  "general  ship."  The  two 
instruments  most  commonly  employed  in  contracts  of 
carriage  are  the  charter  party  and  the  bill  of  lading. 
The  former  is  a  contract  for  the  whole  or  a  large  part  of 
the  vessel ;  the  latter  for  a  smaller  and  varying  portion  of 
the  vessel's  capacity.  There  are  numerous  forms  of 
both  classes  of  documents  employed,  although  efforts 
have  been  made  to  secure  the  use  of  uniform  contracts. 

The  practice  of  leasing  vessels  is  quite  common 
throughout  the  United  States.  In  some  instances  all 
the  vessels  of  an  operating  company  are  chartered  by 
it  from  the  owners.  Some  vessels  operated  in  the  for- 
eign trade  are  chartered  by  the  year  from  foreign 
owners. 


282  TRANSPORTATION    BY    WATER. 

Bills  of  lading  issued  by  vessels  correspond  in  a  gen- 
eral way  to  those  issued  by  railroads.  There  is  consid- 
erable diversity,  especially  in  clauses  limiting  the  lia- 
bility of  the  carrier.  The  New  York  Produce  Exchange 
steamship  bill  of  lading  is  one  often  employed.  Some 
clauses  in  many  bills  of  lading  appear  to  conflict  with 
the  provision  in  the  Harter  Act  prohibiting  a  vessel 
owner  from  inserting  stipulations  to  relieve  himself  from 
the  results  of  negligence. 

Manifests  and  Government  Regulation. 

These  correspond  to  railroad  waybills,  showing  the 
cargo  of  vessels  on  each  voyage.  In  the  case  of  foreign 
voyages,  and  on  the  Great  Lakes,  manifests  must  be 
filed  with  the  customs  officers;  but  they  are  not  ordi- 
narily required  to  be  filed  for  other  coastwise  or  river 
routes.  This  is  a  serious  obstacle  to  the  collection  of 
complete  statistics  of  water-borne  traffic  in  the  United 
States 

The  interstate-commerce  acts  have  been  applied  only 
in  a  limited  degree  to  carriers  by  water;  and  it  is  uncer- 
tain how  far  the  provisions  of  these  acts  as  to  rates  and 
carriers'  liability  are  intended  to  apply  to  water  lines. 
This  is  in  marked  contrast  with  the  close  supervision 
over  vessels  and  their  officers  for  the  protection  of  life. 
In  this  latter  respect  water  traffic  has  long  been  far 
more  closely  regulated  by  government  control  than  rail- 
road traffic.  The  detailed  strictness  with  which  the  con- 
struction, operation,  and  maintenance  of  vessels  is 
watched  by  the  Government,  and  its  complete  system 
of  inspection  thereof,  is  in  very  marked  contrast  to  the 
almost  complete  absence  of  such  control  over  railroads. 


TRANSPORTATION    BY    WATER.  283 

This  difference,  also,  has  borne  with  some  disproportion- 
ate weight  on  the  water  traffic. 

On  the  other  hand,  governmental  control  of  rates  has 
been  much  more  complete  over  railways  than  over 
waterways. 

Cost  of  Marine  Insurance. 

Marine  insurance  charges  are  an  important  factor  as 
an  addition  to  the  cost  of  transportation  by  water,  and 
they  must  be  taken  into  consideration  in  comparing  the 
relative  economy  of  rail  and  water  routes.  Since  the 
floating  equipment  and  cargoes  protected  by  insurance 
are  of  various  kinds,  there  is  a  similar  diversity  in  the 
types  and  stipulations  of  insurance  policies.  As  regards 
vessels,  there  are  river  hull  policies,  ferryboat  hull  poli- 
cies, inland  hull,  tug,  yacht,  schooner,  and  steamboat 
policies.  As  regards  cargoes,  there  are  cotton  policies, 
coal,  lake-cargo,  and  river-cargo  policies.  There  are 
also  blanket  policies  on  hull  and  cargo  and  on  all  the 
vessels  and  cargo  of  particular  lines. 

Features  of  Marine  Insurance. 
There  is  considerable  variety  both  in  the  manner  of 
effecting  insurance  on  vessels  and  cargoes  and  in  rates 
of  premium,  not  only  on  the  different  waterways  of  the 
country,  but  also  in  respect  to  the  several  types  of  ves- 
sels and  the  freight  transported.  Inland  policies  are 
peculiar  in  the  restrictions  upon  the  routes  on  which 
the  craft  may  operate,  and  in  the  varying  rates  of 
premium  on  different  streams.  Some  vessels  carry  only 
fire  insurance,  others  both  fire  and  marine  insurance, 
and  others  fire,  marine,  and  port  insurance.  Often  no 
vessel  insurance  or  insurance  of  any  kind  is  carried. 


284  TRANSPORTATION    BY    WATER. 

Some  vessel  owners  are  their  own  insurers,  providing 
special  reserve  funds  for  that  purpose.  Insurance  on 
vessels  is  usually  by  the  year,  often  with  lay-up  clauses 
applicable  to  the  period  during  which  navigation  is  sus- 
pended. 

Insurance  of  Cargoes. 

Cargo  insurance  in  some  cases  is  entirely  attended  to 
by  the  vessel  owner  on  behalf  of  the  shipper  or  con- 
signee. Frequently,  however,  it  is  effected  on  each  ship- 
ment by  the  shipper  and  continues  until  the  vessel 
reaches  the  port  of  destination  or  for  a  certain  time 
thereafter.  In  other  cases,  however,  the  vessel  owner 
or  owner  of  cargo  lots  takes  out  a  blanket  policy  cov- 
ering all  shipments  for  a  given  period. 

Most  river  steamboats  and  package  freight  shipments 
seem  to  be  protected  by  insurance.  Differences  in  the 
conditions  of  river  improvement,  navigability,  and  river 
dangers  are  reflected  in  the  insurance  rates.  In  fact, 
the  cost  of  insurance  is  often  a  determining  factor  as 
between  rail  and  river  shipments.  The  rail  carrier  being 
practically,  by  law,  the  insurer  of  the  freight,  insurance 
on  rail  freight  is  a  negligible  consideration  to  the  ship- 
per. But  on  water,  and  especially  river  traffic,  this  is 
by  no  means  so. 

Rates  of  Marine  Insurance. 

Selected  river  insurance  rates  have  been  as  follows: 
A  company  operating  on  Virginia  and  Maryland  water- 
ways reports  that  the  insurance  premium  for  a  recent 
fiscal  year  amounted  to  3.1  per  cent  of  the  gross  re- 
ceipts.   Cargo  insurance  on  the  Red  River  is  now  0.9 


TRANSPORTATION    BY    WATER.  285 

per  cent  of  the  value  of  the  goods.  On  the  Mississippi 
River  from  Vicksburg  to  New  Orleans  cargo  insurance 
is  45  cents  per  $100,  or  about  20  cents  per  bale  of  cotton, 
which  must  be  added  to  the  freight  rate  of  75  cents  per 
bale,  thus  making  the  insurance  nearly  one-third  of  the 
freight. 

These  high  and  varying  rates  of  insurance  not  only 
increase  the  cost  of  transportation,  but  they  also  indi- 
cate the  dangers  of  such  traffic  and  add  to  the  uncer- 
tainty and  lack  of  uniformity  so  detrimental  to  shippers' 
interests. 

Taxation  of  Navigation  Companies. 

The  power  over  interstate  and  foreign  commerce 
vested  in  Congress,  together  with  the  specific  prohibi- 
tions of  the  Constitution  against  state  tonnage  and  cus- 
toms duties  without  the  consent  of  Congress,  restricts 
the  taxing  power  of  the  States  over  navigation  as  such, 
while  leaving  the  States  free  to  tax  vessels  like  other 
property  within  their  respective  jurisdictions.  Thus  a 
tax  on  interstate  freight  or  passenger  traffic  as  such  by 
the  States,  is  unconstitutional,  and  the  privilege  of  navi- 
gating public  waters  is  not  subject  to  state  license  tax; 
but  States  may,  under  some  conditions,  impose  fran-- 
chise  taxes  upon  the  gross  receipts  of  transportation 
companies,  even  though  part  of  them  be  derived  from 
interstate  traffic,  or  upon  the  capital  stock  of  companies 
engaged  in  interstate  commerce. 

Tonnage  and  Toll  Charges. 

Tonnage  taxes,  no  matter  in  what  form,  may  not  be 
imposed  by  a  State  on  vessels  simply  because  of  their 


286  TRANSPORTATION    BY    WATER. 

use  of  or  presence  on  a  public  waterway,  although  where 
a  State  has  made  improvements  on  a  waterway  it  may 
charge  a  toll  for  the  use  of  those  improvements  in  rea- 
sonable proportion  to  the  cost  and  maintenance  of  such 
improvements,  even  if  such  toll  be  calculated  on  ton- 
nage. 

Furthermore,  a  State  or  municipality  may  charge 
wharfage  fees  for  the  use  of  landing  places  provided 
by  it,  even  if  such  fees  be  fixed  on  the  basis  of  tonnage. 

Methods  of  State  Taxation. 

One  of  the  common  methods  employed  in  the  taxa- 
tion of  navigation  companies  appears  to  be  an  assess- 
ment of  the  capital  stock  at  its  market  value,  after  de- 
ducting therefrom  the  assessed  valuation  of  the  corpora- 
tion's vessels  and  other  tangible  property  which  are 
taxed  like  similar  property  belonging  to  individuals. 
The  States  using  this  method  are  Massachusetts,  North 
Carolina,  Alabama,  Kentucky,  Illinois,  Kansas,  Minne- 
sota and  North  and  South  Dakota.  Several  States, 
however,  impose  relatively  light  franchise  or  license 
taxes  measured  by  the  par  value  of  the  stock,  and  with- 
out regard  to  any  taxes  assessed  upon  the  tangible  prop- 
erty. These  States  are  New  Jersey,  New  York,  Maine, 
Delaware,  Ohio,  West  Virginia,  Georgia,  Texas,  Colo- 
rado and  Cahfornia.  A  number  of  others  tax  gross  or 
net  receipts  as  well  as  the  capital  stock  and  tangible 
property.  These  States  are  New  York,  Pennsylvania, 
Maryland,  Virginia  and  South  Carolina. 


TRANSPORTATION    BY    WATER.  287 

Vessels  Taxed  as  Personal  Property. 

In  most  of  the  States  water  craft  of  all  kinds  are 
assessed  and  taxed  like  other  personal  property,  either 
at  the  residence  of  the  owners  or,  what  is  often  the  same 
thing,  at  the  port  of  enrollment,  registry,  or  license.  A 
few  States  provide  for  taxes  measured  by  the  gross  or 
net  tonnage  in  lieu  of  other  taxes  on  such  property,  on 
the  assumption  that  the  value  of  vessels  is  roughly  in 
proportion  to  size.  Vessels  engaged  in  the  foreign  trade 
are  in  several  States  favored  either  with  exemption  from 
taxation  or  with  very  light  taxes  based  upon  their  net 
earnings.  Massachusetts,  which  formerly  taxed  the  net 
earnings  or  dividends  in  such  cases,  now  assesses  the 
property,  whether  belonging  to  individuals  or  corpora- 
tions, at  the  rate  of  one-third  of  1  per  cent — about  one- 
fifth  of  the  rate  of  taxation  on  other  property.  A  low 
rate  of  taxation  on  vessel  property  is  probably  of  ad- 
vantage to  the  State  imposing  it,  because  of  the  ease 
with  which  taxation  can  be  evaded  in  respect  of  property 
so  easily  movable. 

Nature  of  Federal  Tax. 

There  is  no  Federal  tax  on  American  vessels  in  do- 
mestic trade.  The  Government  imposes  a  tonnage  tax 
on  vessels  entered  at  ports  of  the  United  States  from 
foreign  ports,  at  the  rate  of  3  cents  per  ton  in  the  case 
of  vessels  from  near-by  foreign  ports,  and  6  cents  per 
ton  when  from  more  distant  places,  but  not  to  exceed 
15  cents  per  ton  per  annum  in  the  former  case,  or  30 
cents  per  ton  per  annum  in  the  latter  case. 


288  TEANSPOETATION    BY    WATER. 

What  Constitutes  Navigable  Water. 

In  some  cases  Congress  has  declared  a  given  stream 
to  be  navigable,  but  the  definition  of  navigability  as  laid 
down  by  the  Supreme  Court  of  the  United  States  seems 
to  be  the  best  statement  of  the  law  on  the  subject.  In 
the  case  of  The  Daniel  Ball,  Justice  Field  said: 

"The  doctrine  of  the  common  law  as  to  the  naviga- 
bility of  waters  has  no  application  to  this  country.  Here 
the  ebb  and  flow  of  the  tide  do  not  constitute  the  usual 
test  as  in  England,  or  any  test  at  all  of  the  navigability 
of  waters.  There  no  waters  are  navigable  in  fact,  or, 
at  least,  to  any  considerable  extent,  which  are  not  sub- 
ject to  the  tide,  and  from  this  circumstance  tide  water 
and  navigable  water  there  signify  substantially  the  same 
thing.  But  in  this  country  the  case  is  widely  different. 
Some  of  our  rivers  are  as  navigable  for  as  many  hun- 
dreds of  miles  above  as  they  are  below  the  limits  of  tide- 
water, and  some  of  them  are  navigable  for  great  dis- 
tances by  large  vessels,  which  are  not  even  affected  by 
the  tide  at  any  point  during  their  entire  length.  A 
different  test  must  therefore  be  applied  to  determine 
the  navigability  of  our  rivers,  and  that  is  found  in  their 
navigable  capacity.  Those  waters  must  be  regarded  as 
public  navigable  rivers  in  law  which  are  navigable  in 
fact.  And  they  are  navigable  in  fact  when  they  are 
used,  or  are  susceptible  of  being  used,  in  their  ordinary- 
condition,  as  highways  for  commerce  over  which  trade 
and  travel  are  or  may  be  conducted  in  the  customary 
modes  of  trade  and  travel  on  water." 


TRANSPORTATION    BY    WATER.  289 

Mice  Distinction  in  Interpretation. 

Thus  a  stream  of  sufficient  capacity  to  float  logs  or 
timber  to  market  has  been  held  to  be  navigable  in  fact. 
And  even  though  a  river  before  its  improvement  had 
contained  obstructions  to  an  unbroken  navigation,  con- 
sisting of  rapids  and  falls,  yet,  inasmuch  as  a  large 
interstate  commerce  was  successfully  carried  on  over  it, 
in  large  vessels  drawn  by  animal  power,  it  was  held  by 
the  Supreme  Court  to  be  navigable  in  fact. 

One  of  the  articles  of  compact  in  the  ordinance  of 
1787  provided  that  "all  navigable  waters  leading  into 
the  Mississippi  and  the  St.  Lawrence  and  the  carrying 
places  between  the  same,  shall  be  common  highways, 
and  forever  free,  as  well  to  the  inhabitants  of  the  said 
territory  as  to  the  citizens  of  the  United  States,  and 
those  of  other  States  that  may  be  admitted  into  the  Con- 
federacy, without  any  tax,  impost,  or  duty  therefor." 

By  act  of  Congress  of  May  26,  1790,  the  territory 
south  of  the  Ohio  River  was  given  the  privileges  of  the 
territory  northwest  of  that  river. 

The  act  of  May  18,  1796,  declared  that  navigable 
rivers  within  public  lands  were  to  be  deemed  pubUc 
highways.  This  was  followed  by  the  act  of  March  3, 
1803,  providing  that  all  navigable  rivers  within  the  ter- 
ritory of  the  United  States  south  of  the  State  of  Ten- 
nessee were  to  remain  public  highways. 

The  act  of  March  3, 1811,  declared  all  navigable  rivers 
and  waters  in  Louisiana  should  remain  public  highways. 

Many  States  Protect  Rivers. 
Provisions  in  the  State  constitutions  deal  with  the 
jurisdiction  over  boundary  rivers,  the  right  of  free  navi- 

I.B.L.  Vol.  8—19 


290  TRANSPORTATION    BY    WATER. 

gation  on  navigable  streams,  and  restrictions  or  obstruc- 
tions to  navigation.  Thus,  the  act  of  Virginia  for  the 
erection  of  Kentucky  as  a  State  provided  that  the  use 
and  navigation  of  the  Ohio  River  within  either  State 
should  be  free,  and  that  each  State  should  have  con- 
current jurisdiction  with  the  State  possessing  the  oppo- 
site shore  of  the  river.  The  constitution  of  Tennessee 
has  contained  since  1796  a  declaration  in  the  bill  of  rights 
"that  an  equal  participation  in  the  free  navigation  of  the 
Mississippi  is  one  of  the  inherent  rights  of  the  citizens 
of  this  State." 

Constitutional  provision  as  to  concurrent  jurisdiction 
over  boundary  streams  are  to  be  found  in  the  constitu- 
tions or  enabling  acts  of  South  Carolina,  Kentucky,  In- 
diana, Missouri,  Iowa,  Wisconsin,  Minnesota,  Kansas, 
Nebraska  and  Orgeon.  Provisions  in  regard  to  the  free 
navigation  of  navigable  streams  are  found  in  the  consti- 
tutions or  enabling  acts  of  South  Carolina,  Tennessee, 
Alabama,  Missouri,  Iowa,  Wisconsin,  Minnesota,  Kan- 
sas, Nebraska  and  Oregon.  Similar  provisions  are 
found  in  the  statutory  codes  of  Mississippi  and  Idaho. 
Some  of  these  refer  to  all  navigable  streams,  while  others 
mention  such  important  rivers  as  the  Mississippi,  the 
Ohio,  the  Missouri,  and  the  Columbia,  with  their  tribu- 
taries. 

The  Mississippi  River  Problem. 

The  Mississippi  River  system  presents  our  greatest 
waterway  problem.  Its  traffic  has  greatly  declined  since 
the  building  of  parallel  railroads.  Excluding  harbor 
and  raft  traffic,  it  was  about  20,000,000  tons  in  1915, 
mainly  coal,  lumber,  railroad  ties,  sand,  gravel,  oil,  cot- 


TBANSPORTATION    BY    WATER.  201 

ton,  sugar,  rice  and  farm  products.  But  the  cotton  traffic 
is  surprisingly  small,  considering  the  nearness  of  cotton 
plantations  and  cotton  markets.  The  only  prosperous 
exception  of  importance  is  the  coal  traffic  downstream. 
This  constitutes  about  56  per  cent  of  the  entire  vessel 
traffic  on  the  Mississippi  system.  It  is  a  highly  devel- 
oped long-distance  bulk  traffic,  with  the  coal  produced 
in  enormous  quantities  directly  on  the  river  bank,  near 
the  Pittsburg  district.  It  is,  however,  practically  con- 
fined to  markets  immediately  along  the  banks. 

Otherwise,  the  river  traffic  is  in  a  discouraging  state. 
The  great  through  business  of  earlier  times  no  longer 
exists.  The  traffic  history  of  St.  Louis  well  illustrates 
this  situation.  River  shipments  there  in  1890  were  over 
600,000  tons;  in  1915,  93,000  tons.  Rail  shipments,  on 
the  other  hand,  in  1890  were  about  5,000,000  tons;  in 
1915,  20,000,000  tons. 

Situation  a  Serious  One. 

The  situation  in  the  Mississippi  Valley  is  significant 
and  serious. 

There  is  a  vast  and  growing  amount  of  freight  in  that 
valley  to  be  moved  both  north  and  south;  there  has 
been,  and  doubtless  will  be  again,  extreme  traffic  con- 
gestion there.  Even  during  the  severest  congestion  the 
Mississippi  River  got  a  very  small  and  a  decreasing 
share  of  the  traffic.  This  condition  is  highly  unsatis- 
factory. 

There  are  two  basic  causes :  First,  the  physical  con- 
ditions, variations  in  water  level  and  the  enormous  de- 
posit of  sediment;  second,  the  destructive  competition 
by  the  parallel  railroads   in  general  refusing  to  share 


292  TRANSPOETATION    BY    WATER. 

the  traflSc  with  the  river.  Rail  competition  is  a  most 
important  factor  in  water  traffic,  and  some  co-opera- 
tion between  railways  and  waterways  seems  absolutely 
necessary  to  insm'e  a  reasonable  use  of  the  rivers. 

New  Orleans  as  a  6ulf  Port. 

Situated  on  the  Mississippi  River,  about  100  miles 
from  the  Gulf  of  Mexico,  New  Orleans  possesses  com- 
manding advantages  as  a  Gulf  port.  The  port  facilities 
for  the  handhng  of  cargoes  are  excellent.  Rail  lines  from 
the  West,  Southwest,  North  and  East  converge  here, 
and  from  New  Orleans  there  are  regular  lines  of  steam- 
ers to  Mexico,  Central  America,  Panama,  Tampa,  Ha- 
vana, Porto  Rico,  Baltimore,  New  York  and  European 
ports,  besides  many  tramp  vessels,  thus  affording  trans- 
portation facilities  for  all  kinds  of  exports  and  imports. 
In  the  foreign  trade  New  Orleans  is  an  important  port 
of  import  for  the  products  of  Central  and  South  Amer- 
ica and  the  West  Indies,  including  such  commodities  as 
coffee,  bananas,  cocoanuts,  pineapples  and  other  tropical 
fruits,  which  are  shipped  through  New  Orleans  to  all 
parts  of  the  United  States. 

As  a  port  of  export  New  Orleans  is  also  of  large  im- 
portance, particularly  in  the  export  of  cotton.  The  ex- 
cellent river  and  rail  facilities  from  many  parts  of  the 
South  make  New  Orleans  the  port  of  export  for  the 
cotton  grown  in  a  considerable  portion  of  the  southern 
territory.  In  the  export  of  grain  New  Orleans  also 
enjoys  an  extensive  trade.  Large  elevators  have  been 
erected  by  railroads  along  the  river  front,  from  which 
shipments  are  made  to  European,  West  Indian  and 
Central  and  South  American  ports. 


TRANSPORTATION    BY    WATER  293 

Large  Coastwise  Traffic. 

Of  the  coastwise  steamship  traffic  at  New  Orleans  the 
most  important  is  that  to  and  from  New  York,  includ- 
ing Pacific  coast  traffic  over  Southern  Pacific  lines. 
From  New  Orleans  to  New  York  the  cargoes  are  made 
up  of  cotton,  rice,  citrus  fruits  and  other  agricultural 
products,  lumber,  sugar,  molasses,  wines,  liquors,  salt 
and  rubber.  From  New  York  the  shipments  consist  of 
general  merchandise,  machinery,  iron  and  steel  products, 
wire,  building  materials,  cordage,  bagging,  etc.  A  line 
between  New  Orleans  and  Baltimore  began  operations 
in  the  summer  of  1907  as  an  experiment.  The  ships  of 
this  line  carry  freight  exclusively,  consisting  of  canned 
goods,  southbound;  and  rice,  sugar,  lumber  and  mer- 
chandise, northbound.  A  steamship  line  also  runs  be- 
tween New  Orleans  and  Tampa,  Fla.,  touching  at  Mo- 
bile, Ala.,  and  Carrabelle,  Fla.  The  westbound  cargoes 
of  the  Une  consist  of  phosphate  rock ;  the  eastbound  car- 
goes are  of  a  miscellaneous  nature,  including  flour,  grits, 
canned  goods,  wine,  salt,  lard,  rice,  sugar  and  other  com- 
modities of  a  similar  character. 

Commerce  on  the  Great  Lakes. 

The  principal  characteristics  of  lake  commerce  are 
the  preponderance  of  eastbound  over  westbound  ship- 
ments, and  the  fact  that  the  traffic  is  mainly  in  a  few 
commodities — ^iron  ore,  grain,  coal  and  lumber.  There 
is  a  considerable  movement  of  miscellaneous  and  pack- 
age freight,  both  local  and  through,  but  it  is  small  com- 
pared with  the  enormous  bulk-freight  traffic  in  the  crude 
products  of  contiguous  mines,  forests  and  grain  fields. 


294  TRANSPOETATION    BY    WATER. 

Through  traffic  constitutes  the  greater  part  of  the 
total  freight  movement.  The  main  course  of  this  Hes 
between  the  western  extremity  of  Lake  Superior  and 
the  southern  shore  of  Lake  Erie. 

Lake  traffic  was  not  reported  as  a  whole  prior  to  1889, 
when,  according  to  the  census,  the  domestic  traffic 
amounted  to  25,266,974  net  tons.  The  domestic  traffic 
amounted  to  45,000,000  tons  in  1901,  and  in  1915  to 
approximately  100,000,000  tons  on  the  Great  Lakes 
and  St.  Lawrence  River. 

Nature  of  the  Traffia 

Iron  ore  and  coal  form  by  far  the  greater  part  of  the 
lake  traffic,  and  furnish  together  98  per  cent  of  the  total 
increase  from  1905  to  1915.  The  movement  of  lumber 
during  these  years  has  declined  in  importance;  other 
traffic  has  remained  about  stationary;  except  the  move- 
ment of  package  and  miscellaneous  freight,  which  has 
increased. 

Since  1890,  with  the  development  of  the  Lake  Su- 
perior mines,  the  United  States  has  taken  first  rank 
among  the  world's  iron  producers.  Of  the  total  do- 
mestic production  of  iron  ore,  approximately  80  per 
cent  was  transported  by  way  of  the  Great  Lakes  (41,- 
000,000  net  tons  in  1906,  and  54,500,000  net  tons  in 
1915),  constituting  in  some  years  more  than  half  of  the 
total  domestic  lake  traffic. 

Next  in  volume  to  iron  ore,  and  first  in  the  westbound 
lake  traffic,  is  the  movement  of  coal.  This  was  over  24,- 
000,000  tons  in  1915,  representing  about  a  fourth  of  the 
domestic  lake  traffic. 


TRANSPORTATION    BY    WATER.  295 

In  the  movement  of  flour  and  grain  (eastboimd)  there 
is  active  competition  between  the  lake  and  all-rail  routes, 
and  with  the  decline  in  export  trade  the  domestic  move- 
ment on  the  lakes  has  dechned  to  some  extent  in  recent 
years,  to  about  150,000,000  bushels  of  grain  and  1,000,- 
000  tons  of  flour  in  1914.  There  has  been  an  increase 
of  traflic  from  American  ports  to  Canada  and  also  be- 
tween Canadian  ports. 

Coastwise  Traflic  Conditions. 

Development  of  railroads  and  the  decline  of  canals 
has  not  prevented  the  continuous  growth  of  a  large 
movement  of  traffic  by  water  along  the  coasts,  bays  and 
sounds,  and  to  some  extent  on  the  tidal  streams  of  the 
Atlantic  and  Gulf  territory.  This  traffic  includes  the 
movement  of  coal  from  points  in  New  York,  New  Jer- 
sey, Pennsylvania,  Maryland  and  Virginia  to  various 
New  England  and  southern  ports;  the  movement  of 
raw  material,  including  cotton,  lumber,  naval  stores  and 
oil,  from  South  Atlantic  and  Gulf  ports  to  northern 
ports  in  exchange  for  manufactured  and  imported 
articles,  as  well  as  for  ice  and  coal;  the  interchange  of 
merchandise  between  the  ports  of  New  York,  Phila- 
delphia and  Baltimore  and  New  England  ports,  and 
between  the  principal  North  Atlantic  ports  and  the 
South  Atlantic  and  Gulf  ports. 

The  Pour  Principal  Ports. 

Of  the  many  Atlantic  ports,  four,  sometimes  called 
"the  Atlantic  portals,"  stand  out  conspicuously,  namely, 
Boston,  New  York,  Philadelphia  and  Baltimore.  Each 
of  these  is  the  distributing  point  for  an  important  area 


296  TRANSPORTATION    BY    WATER. 

of  the  country,  and  also  the  terminal  of  important  lines 
of  railroad  connecting  the  largest  grain-producing  sec- 
tions of  the  United  States  with  the  seaboard,  thus  mak- 
ing each  such  port  a  way  station  for  the  grain  exported 
from  the  United  States  to  other  countries  and  giving 
rise  to  the  well-known  port  differential  system  of  rail 
rates. 

Other  ports  of  importance  are  Portland,  Providence, 
Wihnington  (Del.),  Norfolk,  Wilmington  (N.  C), 
Charleston,  Savannah,  Jacksonville,  Mobile,  New  Or- 
leans and  Galveston. 

At  these  and  other  less  prominent  ports  on  the  At- 
lantic and  Gulf  coasts  a  high  degree  of  specialization 
has  developed  in  the  coastwise  trade.  Coal  is  shipped 
mainly  from  a  few  ports  in  the  Middle  Atlantic  States, 
lumber  and  naval  stores  from  the  South  Atlantic  ports, 
cotton  and  phosphate  from  certain  South  Atlantic  and 
Gulf  ports,  and  petroleum  from  a  few  ports  of  the  Gulf 
and  North  Atlantic  coasts. 

Total  Shipments  and  Receipts  in  American  Vessels  at 
Atlantic  and  Gulf  Ports  for  One  Year. 

Shipments.  Eeceipts. 

Port.  Net  tons.  Net  tons. 

Bangor,  Me 255,613  319,546 

Eockland,  Me 175,904  149,496 

Portland,  Me 303,295  1,357,316 

Portsmouth,  N.  H 25,390  362,820 

Boston,  Mass 887,001  6,533,573 

New  Bedford,  Mass 163,951  581,176 

Fall  River,  Mass 274,646  786,392 

Providence,  R.  1 341,524  2,749,511 

New  London,  Conn 240,305  887,404 

New  Haven,  Conji 161,666  .2,156,814 

New  York,  N.  Y 8,598,374  17,507,906 

Ports  adjacent  to  New  York  Harbor  a 5,052,847  929,836 

Philadelphia,  Pa 5,213,485  2,721,456 

Wilmington,  Del 95,241  250,188 

Baltimore,  Md 3,579,407  1,858,443 

Washington,  D.  C 92,910  599,177 


TEANSPOKTATION    BY    WATER.  297 

Shipments.  Net  tons. 

Port.  Net  tons.  Receipts, 

Norfolk  and  Newport  Newi,  Va 7,680,230  2,808,346 

Wilmington,  N.  C 121,930  145,209 

Charlegton,  8.  C 303,950  414,730 

Savannah,  Ga .907,897  582,966 

Jacksonville,  Fla 661,615  331,951 

Tampa  and  Port  Tampa,  FlA 372,467  188,692 

Pensaoola,  Ma 56,130  123,632 

Mobile,  Ala 260,725  102,533 

Gulfport,  Mias 48,061  346,096 

New  Orleans,  La 741,621  1,182,863 

Port  Arthur,  Tex 1,052,778  39,363 

Galveston,  Tex 734,915  960,982 

Other  ports  6 26,957,580  18,382,541 

Total  b 65,360,958         65,360,958 

a  Jersey  City,  Hoboken,  Newark,  Perth  Amboy,  and  Sonth  Amboy. 

h  Includes  traffic  in  American  vessels  at  Atlantic  and  Gulf  ports  from 
and  to  ports  not  on  the  Atlantic  and  Gulf  coasts,  amounting  to :  Shipments, 
1,587,789  tons;  receipts,  2,340,843  tons. 

Handioaps  of  Kiver  Traffic. 

The  commerce  of  the  rivers  has  not  kept  pace  with 
the  general  industrial  development  of  the  Central  West. 
The  reason  for  this  is  not  far  to  seek.  The  building  and 
competition  of  railroads  and  the  limitations  imposed  by 
the  physical  characteristics  of  the  rivers  have  been  the 
chief  causes  that  have  contributed  to  the  dechne  of  river 
traffic.  When  the  railroads  began  operations,  the  trans- 
portation of  passengers,  mail,  and  the  higher  grades  of 
freight  demanding  expeditious  handling  were  taken  over 
from  the  boat  lines,  until  today  practically  the  only 
traffic  left  to  the  river  is  that  of  package  freight  and 
farm  products  between  local  river  points  and  the  long- 
distance movement  of  coal  and  other  crude  products  of 
relatively  cheap  cost. 

Trouble  with  Water  Levels. 

Boat  hnes  are  handicapped  to  a  great  extent  in  their 
competition  with  railcarriers  by  the  unrehabiUty  in  the 


298  TRANSPORTATION    BY    WATER. 

depth  of  water  in  the  rivers,  causing  at  times  a  practical 
suspension  of  traffic.  This  irregularity  in  the  stages 
of  the  rivers  frequently  entails  heavy  expense,  due  to 
the  cost  of  holding  cargoes  on  river  craft  to  await  navi- 
gable stages.  Then,  too,  during  the  winter  season  the 
northern  rivers  are  closed  by  ice  for  several  months. 
Changes  in  level,  often  exceeding  20  or  30  feet  on  the 
Mississippi,  also  make  the  question  of  terminals  very 
difficult.  This  unreliability  of  the  rivers  has  led  many 
of  the  larger  shippers  along  the  river  to  provide  for 
rail  shipments  only.  Railroads  have  been  more  readily 
adapted  to  the  increasing  demands  of  commerce. 
Heavier  rails  have  been  laid,  rolling  stock  of  larger  ca- 
pacity has  been  added,  locomotives  of  greater  power 
have  been  put  in  service,  and  the  constructive  and  ad- 
ministrative sides  of  railroading  have  been  brought  to 
a  high  state  of  excellence.  These  improvements,  adapted 
to  the  changing  needs  of  commerce,  have  resulted  dis- 
astrously to  the  boat  lines. 

One  Source  of  Wonder. 

Contrasted  with  these  changes,  the  improvement  in 
facilities  offered  by  the  river  carriers  have  been  slight. 
The  river  steamboat  of  today  is  practically  the  steam- 
boat of  half  a  century  ago.  This  is  true  also  of  their 
terminals  and  the  systems  of  loading  and  unloading. 
The  tendency  of  commerce  has  been  toward  a  move- 
ment by  carriers  of  greater  and  greater  capacity,  and 
in  this  respect  the  river-boat  lines  could  not  adequately 
meet  requirements,  because  increased  carrying  capacity 
meant  increased  draft  of  the  boats  and  barges,  and  im- 
provement in  this  direction  proved  impracticable,  since 


TRANSPORTATION    BY    WATER.  299 

the  draft  of  the  river  craft  early  reached  the  greatest 
depth  practicable  for  navigation  on  the  rivers,  on  which, 
generally,  no  systematic  efforts  were  undertaken  to  se- 
cure and  maintain  greater  depths  of  water.  The  river 
boats  have  been  restricted  also  to  the  movement  of 
freight  between  river  points  only;  thus  they  could  not 
hold  their  own  on  competitive  business  with  railroads, 
which  could  recoup  losses  on  competitive  business  by 
increased  charges  at  noncompetitive  points.  Moreover, 
all  river  business  is  naturally  competitive  among  the 
boat  lines  themselves,  while  a  very  great  proportion  of 
the  railroad  traffic  is  not  subject  to  competition.  In 
fine,  the  remarkable  feature  of  river  transportation, 
not  only  on  the  system  of  rivers  in  the  Mississippi  Valley 
but  also  on  practically  all  the  rivers  of  the  country,  is 
not  the  small  amount  of  freight  now  moving  over  the 
rivers,  but  the  fact  that  the  river  lines  carry  the  volimie 
of  traffic  they  do  under  the  existing  conditions. 

On  the  Pacific  Coast. 

The  four  leading  ports  on  the  Pacific  are  San  Fran- 
cisco, Cal.,  Portland,  Ore.,  and  Seattle  and  Tacoma, 
Wash.  Of  these,  San  Francisco  overshadows  in  im- 
portance its  three  rivals,  occupying  on  the  Pacific,  with 
reference  to  water  routes  and  commerce,  a  commanding 
position  comparable  to  that  of  New  York  on  the  At- 
lantic. Each  of  the  four  important  Pacific  ports  is  the 
center  of  numerous  water  routes,  which,  in  connection 
with  transcontinental  and  local  lines  of  railroad,  assume 
a  more  or  less  dominant  place  respecting  the  traffic 
peculiar  to  the  territory  adjacent  to  such  port.  Other 
Pacific  ports  of  importance  are  Grays  Harbor  and 


300  TEANSPORTATION    BY    WATER. 

Humboldt  Bay,  for  lumber  shipments;  Port  Harfoid, 
in  San  Luis  Obispo  Bay,  for  petroleum  shipments ;  the 
ports  of  Los  Angeles  and  San  Diego. 

The  latest  census  report  on  transportation  by  water 
shows  freight  shipments  in  American  vessels  from  San 
Francisco  of  1,656,614  tons,  from  Portland  of  492,573 
tons,  from  Seattle  of  856,988  tons,  and  from  Tacoma 
of  270,256  tons.  San  Francisco  shipments  were  12.5 
per  cent  of  the  total  shipments  in  American  vessels  on 
the  Pacific  coast,  and  for  those  four  ports  were  a  fourth 
of  the  total.  Foreign  trade  is  a  larger  proportion  of 
the  traffic  in  American  vessels  on  the  Pacific  coast  than 
on  the  Atlantic  coast. 

Lumber  the  Most  Important  Item. 

Lumber  constitutes  the  most  important  article  in  the 
Pacific  trade.  Stone,  sand,  etc.,  are  next  in  volume. 
Petroleum  and  other  oils  are  third  in  volume  and  one 
of  the  most  important  articles  of  water-borne  traffic  in 
this  section.  There  is  a  considerable  movement  of  grain 
and  other  agricultural  products.  Coal  is  of  minor  im- 
portance. 

In  several  respects  certain  peculiarities  connected 
with  the  water-borne  traffic  of  this  territory  afi^ord  inter- 
esting contrasts  to  similar  movements  on  the  Great 
Lakes  and  Atlantic  coast.  This  is  especially  true  of 
the  movements  of  the  products  of  forests,  including  logs 
and  lumber,  which  represent  in  point  of  volume  by  far 
the  most  important  conmiodities  shipped  by  water  in  this 
territory. 

Early  in  the  year  1907  many  of  the  lumber-carrying 
vessels  engaged  in  the  Pacific  coast  trade  were  laid  by, 


TEANSPORTATION    BY    WATER.  301 

owing  to  a  shrinkage  in  the  demand  for  lumber.  Prices 
for  carrying  from  Puget  Sound  and  way  ports  to  San 
Francisco  dropped  from  $10.50  to  $5.50  per  thousand 
feet  during  the  spring.  This  was  attributed  to  the 
diminution  in  demand,  but  was  perhaps  due  in  some 
measure  to  the  breaking  up  of  combinations  following 
the  passage  of  the  Cahfornia  anti-trust  law,  known  as 
the  "Cartwright  law." 

The  assistant  manager  of  a  large  lumber  company  at 
San  Francisco  attributed  the  depression  in  charter  rates 
for  carrying  lumber  partly  to  car  shortage  for  Eastern 
shipment  in  the  early  part  of  1907  and  illustrated  his  re- 
marks as  follows:  He  thought  that  there  was  a  great 
deal  of  lumber  put  into  San  Francisco  and  along  the 
coast  because  of  the  car  shortage,  claiming  that  a  great 
many  mills  that  had  been  shipping  lumber  East  were 
naturally  forced  to  put  their  lumber  into  San  Francisco. 

An  Unusual  Shipment  of  Lumber. 

An  unusual  feature  of  the  lumber  trade  that  year  was 
the  shipment  of  a  consignment  of  timber  from  Tacoma 
to  Chicago  by  water  to  San  Pedro  and  thence  east  over 
the  Santa  Fe  Railway  to  Chicago.  The  shippers  could 
not  take  chances  with  the  slow  movement  of  lumber  by 
the  northern  transcontinental  railroads,  and  although 
the  route  involved  an  excess  journey  of  over  1,600  miles, 
both  shipper  and  consignee  found  the  routing  advan- 
tageous in  the  saving  of  time  effected. 

Large  Shipments  of  Crude  Oil. 

Several  pipe  lines  have  been  constructed  in  southern 
California  from  oil  fields,  but  the  greater  proportion  of 


302  TRANSPORTATION    BY    WATER. 

long-distance  transportation  of  crude  oil  in  that  State 
is  still  by  rail  or  water.  Transportation  by  water  is  an 
important  movement  for  several  reasons.  Most  of  the 
oil  fields  are  comparatively  near  the  coast,  and  the  crude 
oil  is  brought  to  the  shipping  ports  by  pipe  lines  for 
shipment  to  the  refineries  at  Point  Richmond,  on  San 
Pablo  Bay  near  San  Francisco.  Shipments  are  also 
made  from  the  refineries  to  the  consuming  markets, 
many  of  which  are  seaports.  Much  of  the  oil  is  not  re- 
fined, but  is  used  for  fuel  purposes ;  and  this  brings  the 
business  into  close  relation  with  steam  navigation  on 
account  of  the  scarcity  of  coal.  Several  of  the  oil  com- 
panies have  established  a  business  in  fuel  oil  in  Hawaii, 
as  well  as  in  Washington  and  British  Columbia,  in  com- 
petition with  coal. 

The  principal  oil-shipping  ports  are  Ventura,  Alca- 
traz,  Port  Harford,  Monterey  and  Point  Richmond.  Oil 
is  shipped  coastwise  from  these  ports  both  in  barrels  and 
in  cases,  but  the  greater  part  of  the  movement  on  the 
Pacific  coast,  as  elsewhere,  appears  to  be  in  tank  steam- 
ers or  tank  barges,  from  which  oil  is  delivered  at  the 
seaport  towns  for  local  consumption  or  for  reshipment 
to  the  interior.  The  export  movement  of  petroleum  is 
also  chiefly  in  tank  steamers. 

Specimen  of  Sailing  Charter. 

This  charter  party,  made  and  concluded  upon  in  the  city  of  , 

the  day  of  ,    18 ,  between ,   of  the 

,  of ,  of  the  burthen  of tons  or  thereabouts,  register 

measurement,  now  lying  in  the  harbor  of  ,  of  the  first  part,  and 

,  of  the  second  part,  witnesseth,  that  the  said  party  of  the  first 

part  agrees  in  the  freighting  and  chartering  of  the  whole  of  the  said  vessel, 

including  deck    (with  the  exception  of  the  cabin  and  necessary 

room  for  the  crew  and  storage  of  provisions  and  sails)",  unto  said  party  of 

the  second  part,  for  the  voyage  from  ,  on  the  terms  following: 

The  said  vessel  shall  be  tight,  staunch,  strong,  and  in  every  way  fitted  for 


TEANSPORTATION    BY    WATER.  303 

such  a  voyage,  and  receive  on  board  during  the  aforesaid  voyage  the  mer- 
chandise hereinafter  mentioned,  including  specie,  and  no  goods  or  merchan- 
dise shall  be  laden  on  board  otherwise  than  from  said  parties  of  the  second 
part,  cr  their  agents.     The  said  party  of  the  second  part  doth  engage  to 

provide  and  furnish  to  the  said  vessel  ,  the  bills  of  lading  to  be 

signed  without  prejudice  to  this  charter,  and  to  pay  to  said  party  of  the 
first  part,  or  agent,  for  the  use  of  said  vessel  during  the  voyage  afore- 
said   '. 

It  is  agreed  that  the  lay  days  for  loading  and  discharging  shall  be  as 
follows  (if  not  sooner  despatched),  commencing  from  the  time  the  vessel 

is  ready  to  receive  or  discharge  cargo:   ,  and  that  for  each  and 

every  day's  detention  by  default  of  the  said  party  of  the  second  part,  or 

agent,  dollars  per  day,  day  by  day,  shall  be  paid  by  said  party 

of  the  second  part,  or  agent,  to  the  said  party  of  the  first  part  or  agent. 
The  cargo  or  cargoes  to  be  received  and  delivered  alongside,  within  reach  of 

the  vessel's  tackles.     ,  the  dangers  of  the  seas  and  navigation  of 

every  nature  and  kind  always  mutually  excepted. 

A  commission  of per  cent  upon  gross  amount  of  this  charter,  pay- 
able hy  the  vessel,  due  ,  on  the  signing  thereof. 

To  the  true  and  faithful  performance  of  all  and  every  of  the  foregoing 
agreements  we,  the  said  parties,  do  hereby  bind  ourselves,  our  heirs,  execu- 
tors, administrators,  and  assigns,  and  also  the  said  vessel's  freight,  tackle, 
and  appurtenances,  and  the  merchandise  to  be  laden  on  board,  each  to  the 
other  in  the  penal  sum  of  . 

In  witness  whereof,  we  hereunto  set  our  hands  the  day  and  year  first 
above  written. 

[Blank  spaces  for  signatures.] 

Time  Charter  Party  for  Great  Lakes. 

Chicago, ,  190 — . 

Charter  party  made  and  entered  into  this day  of by 

and  between  of  ,  owners  of  the  steamer  and 

tow  barges and ,  of ,  their  agents,  parties  of  the 

first  part,  and ,  of ,  party  of  the  second  part,  witnesseth : 

First.  That  for  and  in  consideration  of  the  money  to  be  paid  as  herein- 
after provided,  and  in  consideration  of  the  performance  of  the  conditions 
hereinafter  named  to  be  kept  and  performed  by  the  parties  hereto,  the  said 

party  of  the  first  part  charters  and  lets  the  steamer  and  tow 

barges  to  the  party  of  the  second  part  for  the  season  of  naviga- 
tion of  the  year  19 — ,  beginning  with  April  10th,  19 — ,  or  as  soon  as 
navigation  is  opened,  and  ending  November  30th,  19 — ,  on  the  barges 
,  or  as  soon  as  possible  thereafter  provided  boats  are  on  an  unfin- 
ished voyage,  and  ending  when  navigation  is  closed  and  it  is  unsafe  on 
account  of  ice  and  weather  to  further  operate  said  steamer  . 

Second.  The  party  of  the  first  part  agrees  to  fit  out  properly  am" 
prepare  said  steamer  and  tow  barges  for  said  season  of  navigation  an^ 
warrant  the  same  to  be  in  good  condition  and  seaworthy  for  a  period  of 
said  term,  and  to  deliver  the  said  boats  to  party  of  the  second  part  at 
,  about  April  10th,  19 — ,  or  as  soon  as  navigation  is  opened. 

Third.  The  party  of  the  first  part  agrees,  at  its  own  expense,  to  insure 
the  said  vessels  against  marine  perils  and  fire  and  also  including  the 
damages  by  collision  caused  by  said  vessels  or  either  of  them,  and  the  party 
of  the  second  part  shall  bear  one-half  the  cost  of  all  repairs  to  the  engine, 
boiler,  machinery,  and  hull  of  the  said  steamer  — ^ and  the  barges 


304  TRANSPORTATION    BY    WATER. 


that  are  not  covered  or  insured  under  tlie  best  and  most  favorable 

form  of  marine  and  fire  insurance  policies  that  can  be  obtained  upon  said 
vessels.  In  all  cases  the  money  obtained  from  the  insurance  companies 
shall  be  applied  on  said  repairs  covered  by  such  insurance. 

Fourth.  The  party  of  the  first  part  shall  not  be  compelled  to  insure 
the  said  vessels,  but  in  case  they  do  not  they  shall  assume  the  same  liability 
as  any  insurance  company  would  hare  assumed  under  the  best  and  most 
favorable  policy  that  the  party  of  the  first  part  could  have  obtained  upon 
the  said  steamer  and  barges. 

Fifth.  The  party  of  the  second  part  hereby  agreee  to  run  and  navigate 
the  said  vessels,  man  and  victual  them  at  their  own  proper  expense,  and 
keep  them  at  all  times  in  good  condition,  and  promptly  pay  such  bills  of 
expenses  and  operating  and  repairing  said  boats  as  are  proper  for  them  to 
pay  under  this  charter  party. 

Sixth.  The  party  of  the  second  part  shall  be  entitled  to  receive  and 
collect  all  the  said  steamer's  and  tow  barges'  freights  and  earnings  and 
profits  of  every  kind  during  the  term  of  this  charter  party,  and  shall  at 
the  end  of  the  term  return  the  said  steamer  and  tow  barges  to  the  said 
party  of  the  first  part  at  ,  free  and  clear  of  all  debts  and  incum- 
brances incurred  by  them  under  this  charter  party  and  in  as  good  order  and 
condition  as  when  received,  ordinary  wear  and  tear  only  excepted. 

Seventh.     The  party  of  the  second  part  agrees  to  pay  to  the  party  of 

the  first  part,  through  ,  their  agents,  the  sum  of dollars 

for  the  use  of  the  said  steamer   and  tow  barges  as  follows:    — 

dollars  on  the  first  days  of  May,  June,  July,  August,  September,  October, 

and  November,  and  the  further  sum  of  dollars  at  the  end  of  the 

term  of  this  charter  party. 

Eighth.  It  is  further  agreed  that  the  party  of  the  first  part,  with  the 
consent  of  the  party  of  the  second  part,  shall  nominate  and  appoint  the 
masters  and  engineers  of  said  vessel. 

Ninth.  It  is  further  agreed  that  in  case  of  disaster  to  said  steamer  or 
either  one  of  said  barges,  which  will  take  the  said  steamer  or  either  one  of 
said  barges  out  of  commission  for  a  period  of  time  longer  than  five  days, 
then  and  in  that  case  for  the  period  beyond  said  five  days  there  shall  be  a 
reduction  of  the  charter  price  pro  rata  for  the  time  thus  used,  until  said 
boat  or  boats  shall  again  go  into  commission. 

Tenth.     In  case  of  the  total  or  constructively  total  loss  of  the  said 

steamer  this  charter  party  shall  be  at  an  end,  and  compensation 

to  be  paid  upon  such  proportion  of  the  time  as  the  boats  actually  navigate. 

Eleventh.    For  the  purpose  of  fixing  compensation  in  case  of  loss  of  one 

or  both  barges,  the dollars  to  be  paid  under  this  charter  party  is 

to   be  considered  as  paying  dollars  for  the  steamer  ; 

dollars  for  the  barge ,  and dollars  for  the  barge 

.    In  case  of  loss  of  either  or  both  barges  ( or ) 

proportion  of  the  above  sums  are  to  be  paid  as  the  boat  or  boats  actually 
navigate  under  the  conditions  of  this  charter  party.  And  the  remaining 
boats  are  to  be  continued  in  the  service  of  the  party  of  the  second  part,  as 
if  no  accident  had  happened. 

In  witness  whereof  the  parties  have  hereunto  set  their  hands  this  day 
and  year  first  above  written. 

[Blank  spaces  for  signatures.] 


TRANSPORTATION    BY    WATER.  305 

Memorandum  of  Pacific  Charter. 

Seattle,  Washington,  April  ^3,  19   , 

Vessel:    American  steamer  . 

Tonnage:   register. 

Present  location:    Seattle,  Washington. 

Duration:  One  voyage  from  Puget  Sound  to  San  Francisco  with  option 
of  two  (2)  voyages,  said  option  to  be  declared  before  vessel  sails  from 
Puget  Sound  on  the  first  voyage. 

Basis:  Government  form  charter.  Operators  paying  for  usual  insurance, 
upkeep,  wages,  and  subsistence  of  crew,  charterers  to  pay  cost  for  port 
charges  including  stevedoring  and  trimming  of  cargo  and  customary  over- 
time for  crew  working  cargo,  extra  insurance,  and  extra  crew  required 
over  and  above  ship 's  regular  certificate. 

Delivery  and  redelivery  to  be  made  at  Seattle,  Washington. 

Eate:  dollars  daily. 

Charter  money  payable  at  Seattle  on  completion  of  each  round  voyage. 

Miscellaneous:  Operators  guarantee  steamer's  fuel  consumption  will  not 
exceed  twenty-two  tons  daily  Black  Diamond  under  ordinary  conditions,  and 
that  ship  will  carry  three  thousand  three  hundred  gross  tons  (3,300)  cargo 
coal  if  same  is  properly  stowed.  The  owners  shall  not  be  liable  for  loss  or 
damage  occasioned  by  fire  from  any  cause,  or  wherever  occurring;  by 
barratry  of  the  master  or  crew;  by  robbers  or  thieves,  by  arrest  and 
restraint  of  princes,  rulers,  or  people,  riots,  strikes,  or  stoppage  of  labor;  by 
explosion,  bursting  of  boilers,  leakage  of  steam  or  water  pipes,  breakage  of 
shafts,  or  any  latent  defect  in  hull,  machinery,  or  appurtenances;  or 
unseaworthiness  of  the  vessel,  even  existing  at  the  time  of  shipment,  or 
sailing  on  the  voyage,  providing  the  owners  have  exercised  due  diligence 
to  m£^e  the  vessel  seaworthy. 

[Blank  spaces  for  signatures.] 

[Here  insert  charter  party.] 

San  Francisco, 


It  is  this  day  mutually  agreed  between  ,  agents  for  owners  of 

the  steamship  or  vessel  called  the  ,  of  tons  gross  register, 

and  tons  net  register,  classed  ,  and  guaranteed  to  carry 

tons  dead  weight  of  cargo  and  fuel,  inclusive,  on  Lloyd's  summer 

freeboard,  now  ,  and  ,  of  San  Francisco,  merchants  and 

charterers,  for  the  term  of calendar  months  certain,  the  charterers 

having  the  option  of  continuing  the  charter  for  a  further  period  of 

calendar  months,  more  or  less,  at  the  option  of  the  charterers,  they  giving 
the  owners  one  month's  notice  previous  to  redelivery  of  the  vessel.  The 
hire  to  commence  from  the  day  on  which  she  is  delivered  or  placed  at  the 

disposal    of   the    charterers    (but    not   before   ,   if    required),   at 

Nanaimo,  B.  C,  in  such  dock  or  such  safe  wharf  or  place  (where  she  may 
always  safely  lie  afloat),  as  charterers  may  direct,  she  being  then  ready 
with  clear  holds,  tight,  staunch,  strong,  and  every  way  fitted  for  the 
service  (and  with  full  complement  of  oflacers,  seamen,  engineers,  and  firemen 
for  a  vessel  of  her  tonnage)  ;  to  be  employed  to  carry  coal  between  British 
Columbia  and  San  Francisco,  on  the  following  conditions: 

That  the  owners  shall  provide  and  pay  for  aU  provisions  and  consular, 
shipping,  and  discharging  fees  of  the  captain,  officers,  engineers,  firemen, 
and  crew,  and  shall  pay  all  wages  of  the  captain,  officers,  engineers,  firemen, 
and  crew ;  shall  pay  for  the  insurance  on  the  vessel ;  also  for  all  deck,  galley, 
I.B.L.     Vol.  8—20 


306  TRANSPORTATION    BY    WATER. 

and  engine-room  stores,  bunker  eoal  excepted,  and  maintain  her  in  a  thor- 
dughly  efficient  state  in  hull  and  machinery  for  the  service. 

That  the  charterers  shall  provide  and  pay  for  all  bunker  coals,  port, 
light  and  dock  charges,  pilotages,  agencies,  consular  charges  (except  those 
pertaining  to  the  captain,  officers,  or  crew),  commissions,  labourage,  Suez 
and  other  canal  dues  when  incurred,  also  all  charges  appertaining  to  the 
cargoes  they  may  put  on  board. 

That  the  charterers  shall  accept  and  pay  for  all  coal  in  ship's  bunkers 
upon  commencement  of  hire;  and  the  owners  shall  on  expiry  of  this  charter 
party,  pay  for  all  coal  then  left  in  the  bunkers  at  current  market  prices  of 
the  port  where  the  hire  begins  and  ends. 

That  the  charterers  shaU  furnish  all  coal  cargo  that  may  be  required  by 
Ci^tain,  and  shall  pay  for  the  use  and  hire  of  the  said  vessel  at  and  after 

the  rate  of  sterling  per  ton  of  2,240  lbs.  per  calendar  month  on 

actual  outturn  of  coal  cargo  as  ascertained  by  United  States  customs  weights. 

Payments  to  be  made  in  cash  in  advance  monthly,  commencing  on  the 
day  of  delivery  as  aforesaid;  hire  to  continue  from  the  time  specified  for 
terminating  the  charter  until  her  redelivery  to  owners  (unless  lost)  at  San 
Francisco  and  to  be  payable  in  San  Francisco  or  at  owner's  option  by 
telegraphic  transfer  on  London  at  their  expense. 

The  monthly  settlements  to  be  on  basis  of tons  cargo  delivery 

and  an  adjustment  to  be  made  quarterly  on  average  outturn  of  cargo. 

Captain  to  take  on  board  at  loading  port  sufficient  bunker  coal  for  the 
round  voyage  between  British  Columbia  and  San  Francisco. 

Charterers  have  the  option  of  employing  vessel  in  other  lawful  trades, 
in  which  event  the  monthly  rate  of  freight  payment  to  be  made  as  if  she 
was  employed  between  British  Columbia  and  San  Francisco,  it  being  cal- 
culated on  D.  W.  capacity  less  bunkers  required  on  a  voyage  from  Nanaimo 
to  San  Francisco  and  return,  computed  as  usual  hitherto ;  if  employed  north 
of  51°  on  west  coast  of  North  America  or  north  of  46°  on  Siberian  coast, 
charterers  to  pay  extra  insurance  on  vessel. 

Should  the  vessel  be  on  a  voyage  occupying  more  time  than  herein  stipu- 
lated, the  rate  of  hire  for  such  additional  period  to  be  in  the  same  pro- 
portion as  above,  and  if  redelivered  with  owner 's  consent  before  the  expira- 
tion of  the  time  stipulated  a  corresponding  rebate  of  hire  to  be  allowed. 

Typical  Bill  of  Lading. 

Received,  in  apparent   good  order  and  condition,   by  S.   S.  ■ 

from  ,  to  be  transported  by  the   good  steamship 


lying  in  the  port  of  and  bound  for  ,  gallons 

crude  petroleum  in  bulk,  being  marked  and  numbered  as  per  margin 
(weight,  quality,  contents,  and  value  unknown),  and  to  be  delivered  in 

like  good  order  and  condition  at  the  port  of unto or  to 

his  or  their  assigns,  he  or  they  paying  freight  on  the  said  goods  on  discharge 
in  accordance  with  charter  party  made  abroad  and  observing  all  other  con- 
ditions as  mentioned  therein.  General  average  payable  according  to  York- 
Antwerp  rules. 

It  is  mutually  agreed  that  the  ship  shall  have  liberty  to  sail  without 
pilots;  to  tow  and  assist  vessels  in  distress;  to  deviate  for  the  purpose  of 
saving  life  or  property;  that  the  carrier  shall  have  liberty  to  convey  goods 
in  lighters  to  and  from  the  ship  at  the  risk  of  the  owners  of  the  goods; 
and,  in  case  the  ship  shall  put  into  a  port  of  refuge,  or  be  prevented  from 
any  cause  from  proceeding  in  the  ordinary  course  of  her  voyage,  to 
tranship  the  goods  to  their  destination  by  any  other  steamship. 


TRANSPORTATION    BY    WATER.  807 

It  is  also  mutually  agreed  that  tke  carrier  shall  not  be  liable  for  loss  or 
damage  occasioned  by  causes  beyond  his  control,  by  the  perils  of  the  sea, 
or  other  waters,  by  fire  from  any  cause  or  wheresoever  occurring;  by  bar- 
ratry of  the  master  or  crew,  by  enemies,  pirates,  or  robbers,  by  arrest  and 
restraint  of  princes,  rulers,  or  people,  riots,  strikes,  or  stoppage  of  labor; 
by  explosion,  bursting  of  boilers,  breakage  of  shafts,  or  any  latent  defect  in 
hull,  machinery,  or  appurtenances;  by  collisions,  stranding,  or  other  acci- 
dents of  navigation  of  whatsoever  kind  (even  when  occasioned  by  the  neg- 
ligence, defaiSt,  or  error  in  judgment  of  the  pilot,  master,  mariners,  or 
other  servants  of  the  shipowner  not  resulting,  however,  in  any  case,  from 
want  of  due  diligence  by  the  owners  of  the  ship  or  any  of  them,  or  by  the 
ship's  husband  or  manager);  nor  for  heating,  decay,  putrefaction,  rust, 
sweat,  change  of  character,  drainage,  leakage,  breakage,  or  any  loss  or 
damage  arising  from  the  nature  of  the  goods  or  the  insufficiency  of  pack- 
ages ;  nor  for  land  damage ;  nor  for  the  obliteration,  errors,  insufficiency  or 
absence  of  marks,  numbers,  address  or  description;  nor  for  risk  of  craft, 
hulk,  or  transhipment;  nor  for  any  loss  or  damage  caused  by  the  prolonga- 
tion of  the  voyage. 

1.  It  is  also  mutually  agreed  that  the  carrier  shall  not  be  liable  for 
gold,  silver,  bullion,  specie,  documents,  jewelry,  pictures,  embroideries,  works 
of  art,  silks,  furs,  china,  porcelain,  watches,  clocks,  or  for  goods  of  any 
description  which  are  above  the  value  of  $500  per  package,  unless  bills  of 
lading  are  signed  therefor,  with  the  value  therein  expressed,  and  a  special 
agreement  is  made. 

2.  Also,  that  shippers  shall  be  liable  for  any  loss  or  damage  to  ship 
or  cargo  caused  by  inflammable,  explosive,  or  dangerous  goods  shipped 
without  full  disclosure  of  their  nature,  whether  such  shipper  be  principal 
or  agent ;  and  such  goods  may  be  thrown  overboard  or  destroyed  at  any  time 
without  compensation. 

3.  Also,  that  the  carrier  shall  have  a  lien  on  the  goods  for  all  fines  or 
damages  which  the  ship  or  cargo  may  incur  or  suffer  by  reason  of  the 
incorrect  or  insufficient  marking  of  packages  or  description  of  their  contents. 

4.  Also,  that  in  case  the  ship  shall  be  prevented  from  reaching  her 
destination  by  quarantine,  the  carrier  may  discharge  the  goods  into  any 
depot  or  lazaretto,  and  such  discharge  shall  be  deemed  a  final  delivery 
under  this  contract,  and  all  the  expenses  thereby  incurred  on  the  goods 
shall  be  a  lien  thereon. 

5.  Also,  that  if  the  goods  be  not  taken  by  the  consignee,  within  such 
time  as  is  provided  by  the  regulations  of  the  port  of  discharge,  they  may 
be  stored  by  the  carrier  at  the  expense  and  risk  of  their  owners. 

6.  Also,  that  full  freight  is  payable  on  damaged  goods;  but  no  freight 
is  due  on  any  increase  in  bulk  or  weight  caused  by  the  absorption  of  water 
during  the  voyage. 

7.  Also,  that  if  on  a  sale  of  the  goods  at  destination,  for  freight  and 
charges,  the  proceeds  fail  to  cover  said  freight  and  charges,  the  carrier  shall 
be  entitled  to  recover  the  difference  from  the  shipper. 

8.  Also,  that  in  the  event  of  claims  for  short  delivery  when  the  ship 
reaches  her  destination,  the  price  shall  be  the  market  price  at  the  port  of 
destination  on  the  day  of  the  ship's  entry  at  the  custom-house,  less  all 
charges  saved. 

And  finally,  in  accepting  this  bill  of  lading,  the  shipper,  owner,  and 
consignee  of  the  goods  and  the  holder  of  the  bill  of  lading  agree  to  be 
bound  by  all  of  its  stipulations,  exceptions,  and  conditions,  whether  written 
or  printed,  as  fully  as  if  they  were  all  signed  by  such  shipper,  owner,  con- 
flignee,  or  holder. 


308 


TRANSPORTATION    BY    WATER. 


In  witness  whereof,  the  master  or  agent  of  the  said  ship  hath  affirmed 

to bills  of  lading,  all  of  this  tenor  and  date,  numbered 

consecutively,  one  of  which  being  accomplished,  and  given  up  to  the  carrier, 
the  others  to  stand  void. 

Hours  occupied  in  loading,  — 


Dated  in 


Cleared    by 


this 


day  of 


19—. 


Specimen  of  Ship  Manifest. 


men, 


.      Manifest    of   the    whole   cargo    on    board   the 

master.  Burthen, tons.  Navigated  by 

boys.    Bound  from  the  port  of for . 


Marks  and  Nos. 


No.  of 
Entries 


Packages  and  con- 
tents 


Shipper. 


Residence 


Consignee. 


R'sid'nce 


[On  back  of  manifest.] 
I^ ^  master  of  the ,  do  solemnly  swear  to  the  truth  of 


the  annexed  manifest,  and  that,  to  the  best  of  my  knowledge  and  belief, 
all  the  goods,  wares,  and  merchandise  of  foreign  growth  and  manufacture 
therein  contained  were  legally  imported,  and  the  duties  thereon  paid  or 
secured.    So  help  me  God. 


Sworn  to  this 


day  of 


19 


District  and  poet  of 


master  of  the 


of 


-,  Deputy  Collector, 

,  having  sworn  as  the 
articles  of  entry. 


law  directs  to  the  annexed  manifest,  consisting  of 

and  delivered  duplicates  thereof,  permission  is  hereby  granted  to  the  said 

to  proceed  to  the  port  of ,  in  the  State  of . 

Given  under  my  hand,  at ,  this day  of ,  19  — . 


-,  Naval  Olficer. 


-,  Deputy  Colleijtor. 


CHAPTER  XIX. 
LAKES-TO-THE-GULF  WATERWAY. 

No  discussion  of  the  water  or  rail-and-water  feature 
of  transportation  would  be  complete  without  extended 
mention  of  what  is  being  done  in  the  way  of  securing 
a  deep  waterway  connecting  the  Great  Lakes  with  the 
Gulf  of  Mexico;  and  why  this  work  is  advocated  by 
heavy  shippers.  It  should  be  borne  in  mind  that  the 
Drainage  Canal,  completed  a  few  years  ago  at  Chi- 
cago, is,  as  the  name  indicates,  solely  a  sanitary  work. 
It  is  proposed  to  utilize  the  channel  of  this  canal  in  con- 
nection with  the  proposed  waterway;  but  they  are  two 
separate  and  distinct  works,  one  purely  local  and  sani- 
tary in  its  nature,  the  other  a  national  undertaking  in 
the  interest  of  commerce. 

Why  a  Waterway  Is  Needed. 

In  urging  the  completion  of  this  latter  work  Mr.  E. 
S.  Conway,  Chairman  of  the  Deep  Waterway  Com- 
mittee of  the  Chicago  Association  of  Commerce,  very 
properly  calls  attention  to  the  great  productive  resources 
of  the  Middle  West,  and  the  necessity  of  economical 
transportation  in  getting  these  products  to  market — a 
competitive  means  of  transportation  that  will  not  only 
ensure  cheaper  rates  on  products  that  are  now  being 
moved,  but  will  make  possible  the  moving  of  other  com- 
modities which  are  now  practically  unsalable  abroad  be- 

309 


310  LAKES-TO-THE-GULF    WATERWAY. 

cause  the  lowest  obtainable  rates  of  carriage  are  still 
practically  prohibitive. 

Production  of  Middle  West. 

The  latest  obtainable  official  statistics  show  that  in 
1914!  the  Central  or  Middle  West  contained  more  than 
one-half  of  the  wealth  invested  in  improved  farms  in 
the  United  States;  it  had  more  than  one-half  of  the 
livestock,  and  it  produced  78  per  cent  of  the  food  prod- 
ucts. In  the  same  region  was  produced  more  than  one- 
half  of  the  butter,  corn,  wheat,  oats,  barley,  rye,  flax- 
seed, potatoes,  broom  corn  and  poultry  raised  in  this 
country.  This  was  the  condition  in  1914;  the  showing 
of  the  Middle  West  is  even  greater  now. 

The  following  table  shows  the  chief  products  of  the 
farms  in  the  United  States  and  the  percentage  of  each 
that  is  grown  in  the  Middle  West : 

United  states.  Middle  West.  PerCt. 

Number  of  farms 5,739,657  2,196,567  38 

Value  of  improved  farms 16,674,690,438  9,563,880,438  57 

Value  of  live  stock 3,078,050,041  1,576,977,350  58 

Value  of  farm  property 20,514,001,838  11,504,919,848  51 

Value  of  farm  products 4,739,118,752  2,360,011,670  49 

Value  of  farm  neat  cattle 1,476,499,714  257,903,887  16 

Value  of  products  per  farm 826  1,074  — 

Value  of  poultry 85,794,996  43,416,629  56 

Butter,  lbs 1,491,871,673  810,841,697  54 

Cheese,  lbs 298,344,654  133,964,093  45 

Wool,  lbs 276,991,812  73,909,116  26 

Corn,  bushels 2,666,440,279  1,941,220,100  73 

Wheat,  bushels 658,534,252  441,300,918  67 

Oats,  bushels  943,389,375  764,279,166  89 

Barley,  bushels 119,634,877  81,560,497  68 

Rye,  bushels 25,568,625  25,568,625  63 

Flax  seed,  bushels 19,979,492  19,797,647  99.9 

Hay,  tons 84,010,915  48,988,418  58 

Potatoes,  bushels 273,318,167  141,800,447  52 

Tobacco,  lbs 868,112,865  123,201,591  14.2 

Broom  corn,  lbs 90,947,370  81,264,590  80 

Orchard  products,  value 83,751,840  24,376,534  21 


LAKES-TO-THE-GULF    WATERWAY.  311 

Great  Growth  of  Manufactures. 

While  the  Middle  West  is  regarded  as  distinctively 
an  agricultural  district  it  has,  within  the  last  twenty 
years,  assumed  an  importance  as  a  manufacturing  center 
that  has  placed  it  in  advance  of  most  of  the  other  geo- 
graphical divisions  of  the  United  States.  The  follow- 
ing table  gives  data  as  to  the  industrial  energies  of  both 
the  United  States  and  Middle  West,  with  the  percent- 
ages of  each  that  belong  to  the  latter: 

United  states.       Middle  West.  PerCt. 

Number  of  Establishments 512,191  182,467  35.62 

Capital $  9,831,486,500     $  2,902,008,108  29.41 

Wage  Earners 5,314,539  1,537,301  28.10 

Wages 2,327,295,545  687,980,264  29.56 

Cost  of  material 7,346,358,979  2,545,673,693  34.66 

Value  of  product 13,000,149,159  4,338,351,840  33.37 

Lack  of  Transportation  Facilities. 

Unexampled  as  has  been  the  industrial  and  commer- 
cial advancement  of  this  part  of  the  country  its  progress 
has  been  seriously  impeded  by  lack  of  cheaper  transpor- 
tation. The  Eastern,  Southern  and  Western  divisions 
of  the  Union  are  near  tide  water,  to  which  they  are 
easily  accessible  both  by  rail  and  water  transportation, 
but  the  heart  of  the  continent,  the  Central  West,  is  from 
500  to  1,500  miles  from  the  ocean,  and  it  is  forced  to 
depend  chiefly  upon  railways  as  the  medium  for  the 
conveyance  of  its  bulky  and  inexpensive  products,  many 
of  them  exceedingly  sensitive  to  charges  for  transporta- 
tion, to  oceanic  ports  for  transshipment  to  the  foreign 
markets  of  the  world  or  to  reach  those  sections  of  our 
own  country  where  the  consumption  of  agricultural 
commodities  far  exceeds  local  production. 


812  LAKES-TO-THE-GULF    WATERWAY. 

Heavy  Tax  Upon  Producers. 

Varying  inequalities  and  extraordinary  conditions 
have  imposed  many  heavy  burdens  upon  farmer,  manu- 
facturer and  laborer  in  the  Central  West,  to  which  they 
have  loyally  submitted,  hoping  that  the  injustice  of 
which  they  had  just  reason  to  complain  would  be  recog- 
nized and  corrected.  The  Central  West  is  abundantly 
supplied  with  natural  water  courses  which  require  only 
a  small  outlay  of  money  to  enable  ocean  vessels  to  re- 
ceive and  discharge  their  cargoes  at  inland  ports.  By 
deepening  and  straightening  the  Upper  Mississippi,  the 
improvement  of  the  Illinois  River  and  connecting  that 
stream  with  the  Great  Lakes,  the  Great  Middle  West 
would  be  linked  with  the  Atlantic  and  Gulf  ports.  Upon 
the  completion  of  the  Panama  canal  it  would  be  within 
direct  communication  with  the  cities  of  the  Pacific  coast 
as  well  as  with  those  of  Hawaii,  the  Philippines,  Japan, 
China  and  Western  South  America.  The  saving  of  dis- 
tance between  Chicago  and  San  Francisco  and  Asiatic 
ports,  via  the  Mississippi  River  and  the  Panama  Canal, 
over  the  old  route  around  South  America  and  through 
the  straits  of  Magellan,  would  be  between  8,700  and 
8,946  miles. 

Improvement  of  Stream  Urged. 
For  the  last  sixty  years,  and  especially  since  the  close 
of  the  Civil  war,  the  demands  for  the  improvement  of 
that  stream,  and  its  navigable  affluents,  have  been  urgent 
and  universal.  The  greater  cost  to  the  shipper  in  the 
carriage  of  heavy  and  bulky  products  by  rail  than  by 
water  is  so  marked  as  to  emphasize  the  present  popillar 
demand  for  the  rehabilitation  and  improvement  of  the 


LAKES-TO-THE-GULF    WATERWAY,  813 

practically  abandoned  water  courses,  so  that  they  may 
be  used  not  only  to  carry  the  largely  increased  volume 
of  domestic  production,  but  also  that  they  may  hold  in 
check  the  carrying  charges  by  rail  which  in  many 
instances  are  so  high  as  to  prove  a  serious  restraint  upon 
the  productive  energies  of  the  people. 

Water  Transportation  Cheapest. 

The  history  of  commerce  in  every  country  on  the 
globe  proves  that  navigable  waterways  not  only  afford 
shippers  the  cheapest  possible  means  for  the  carriage 
of  freight,  but  they  also  regulate  all  charges  for  its 
transportation  in  their  vicinity.  The  cost  to  the  shipper 
per  ton-mile  for  moving  freight  by  rail  varies  some- 
what according  to  cost  of  construction,  grades,  curves, 
etc.,  of  different  roads,  but  in  this  country  such  cost  is 
included  between  6  and  8.58  mills,  the  average  of  all  the 
roads  in  the  United  States  being  7.5  mills  per  ton  per 
mile.  On  the  other  hand,  the  cost  of  that  service  by 
water  varies  from  .92  of  a  mill,  on  the  Great  Lakes,  to 
.1  of  a  mill  on  the  Ohio  and  Lower  Mississippi  Rivers. 
A  condition  clearly  illustrative  of  the  importance  of 
water  transportation,  as  compared  with  conveyance  by 
rail  when  coarse  products  are  involved,  is  at  hand  at  our 
own  doors.  Fully  seven-tenths  of  all  the  iron  ore  mined 
in  the  United  States  is  obtained  from  the  extensive  ore 
fields  of  Michigan,  Wisconsin  and  Minnesota,  those  de- 
posits being  made  accessible  to  the  coal  beds  of  lUinois, 
Ohio  and  Pennsylvania  by  cheap  water  transportation 
on  the  Great  Lakes.  The  result  is  that  ore  and  fuel, 
brought  together  at  a  small  cost  of  transportation,  has 


314  LAKES-TO-THE-GULF    WATERWAY. 

given,  not  only  the  Middle  West,  but  the  entire  country, 
cheap  pig  iron  and  steel  which  are  fundamental  in  all 
considerations  involving  diversified  and  profitable  in- 
dustry. This  is  why  the  States  of  Ilhnois,  Ohio  and 
Pennsylvania  make  nearly  all  the  iron  and  steel  that  are 
produced  in  the  United  States,  while  their  cities  are 
typical  industrial  centers  as  to  the  variety  and  volume  of 
those  manufactured  goods  of  which  iron  and  steel  form 
the  principal  factors. 

Examples  of  Water  Charges. 

On  the  Erie  Canal  the  cost  of  transportation  is  1.9 
mills,  but  upon  the  deepening  of  that  waterway  to  12 
feet  the  expense  will  be  reduced  to,  approximately,  half 
a  mill.  Col.  John  L.  Vance,  President  of  the  Ohio  River 
Improvement  Association,  said  in  an  address  recently 
deUvered  that  "the  heavier  freight — coal,  iron,  steel, 
locomotives — are  today  carried  on  the  Ohio  and  the 
Lower  Mississippi  for  one-third  of  a  mill  per  ton  per 
mile — a  less  figure  than  on  any  other  waterway  in  the 
world.  This  figure  includes  the  return  of  empties,  and 
leaves  a  handsome  profit  to  the  transportation  lines." 

As  an  example  of  cheap  transportation  on  the  Ohio 
and  Mississippi  the  steamer  Sprague  may  be  cited.  She 
has  handled  safely,  in  one  tow,  70,000  tons  of  freight  in 
barges.  With  the  most  approved  railway  appliances 
in  use  at  the  present  time  this  would  require  2,333  cars 
— making  a  train  fifteen  miles  long,  not  including  the 
locomotives  required  to  move  these  cars.  Cotton  is 
shipped  by  rail  from  Dallas,  Texas,  to  tide  water  at 
Galveston,  a  distance  of  300  miles,  at  a  freight  charge  of 
$3  a  bale,  while  from  Lake  Providence,  La.,  to  New  Or- 


LAKES-TO-THE-GULF    WATERWAY.  315 

leans  the  freight  charge  by  water  is  50  cents  a  bale  for 
exactly  the  same  distance.  The  rate  on  coal  from  Pitts- 
burg to  Lake  Erie,  135  miles  by  rail,  is  90  cents  a  ton, 
while  iron  ore  is  carried  from  the  Mesaba  mines  on  Lake 
Superior  to  Ashtabula,  Ohio,  by  water,  a  distance  of 
1,000  miles,  for  from  75  to  80  cents  a  ton.  Cargoes  of 
coal  are  carried  back,  on  the  return  trip,  in  the  same  ves- 
sels for  35  cents  a  ton. 

Bulky  Goods  Suffer  Most. 

These  indisputable  facts  demonstrate  the  decided  ad- 
vantage that  exists  in  the  cost  of  carriage  of  coarse 
freight  by  water  over  that  by  rail.  The  effect  of  cheap 
transportation  is  easily  illustrated.  Take  a  bale  of  cot- 
ton, at  ten  cents  a  pound,  and  it  is  worth  $50.  It  will 
take  63  bushels  of  wheat  at  80  cents  a  bushel  or  100 
bushels  of  corn  at  50  cents  a  bushel,  to  bring  as  much 
money  in  the  market  as  the  cotton  will  bring.  The  cot- 
ton will  weigh  500  pounds ;  the  wheat  3,700  pounds  and 
the  corn  7,000  pounds.  In  other  words  it  costs  more  than 
seven  times  as  much  to  transport  a  dollar's  worth  of 
wheat,  or  fourteen  times  as  much  to  carry  a  dollar's 
worth  of  corn  to  market  as  it  does  to  ship  a  dollar's 
worth  of  cotton,  the  rate  being  the  same.  The  very 
marked  disproportion  in  the  weight  and  bulk  shows  why 
the  Western  farmer  is  so  insistent  upon  cheaper  methods 
of  carrying  his  bulky  products  to  market  than  those 
offered  by  railroads. 

Competition  Brings  More  Business. 

Advocates  of  waterways  say  the  fear  that  canals  may 
supersede  the  railroads  is  not  only  groundless  but  it  has 


316  LAKES-TO-THE-GULF    WATERWAY. 

been  established  as  a  fact  that  where  railroads  arid  canals 
compete  as  common  carriers  the  result  has  invariably 
been  that  the  tonnage  of  the  former  has  been  largely 
increased.  The  waterway  through  the  Great  Lakes 
made  Chicago  the  greatest  railway  center  in  the  world. 
The  barge  has  not  superseded  the  freight  car.  Both 
these  means  of  conveying  freight  are  thriving,  not  only 
around  the  Great  Lakes  but  also  along  all  the  great 
water  courses  and  the  Atlantic  sea  coast.  The  water- 
way furnishes  the  more  economical  means  for  carrying 
the  slow  and  bulky  products  of  the  forest,  mines,  farms 
and  furnaces ;  the  railroads  provide  the  most  rapid  means 
for  transporting  the  costly  and  finished  products  of  the 
loom,  mill  and  factory. 

Effect  of  Water  Competition. 

The  two  are,  however,  competitors  within  certain  well 
defined  limits.  The  waterway  does  oblige  railroads  to 
lower  their  rates  on  all  classes  of  freight.  For  instance, 
this  condition  recently  existed  in  Chicago.  The  Cana- 
dian railroads  were  competing  with  the  Dominion  canals 
in  the  carrying  of  grain  from  Chicago  to  Montreal,  and 
made  a  rate  of  3^/2  cents  a  bushel.  The  American  rate 
was  and  remained  7  cents  a  bushel  by  rail.  The  reason 
for  this  is  that  the  Canadian  canals  made  a  low  rate 
which  the  Canadian  roads  were  forced  to  meet  to  secure 
the  business,  while  the  Erie  canal  was  not  an  effective 
competitor  of  the  American  roads,  which  also  owned 
the  Lake  steam  grain  fleet,  and  the  higher  rate  was  sus- 
tained. The  waterway  is  the  only  competitor  the  rail- 
road has. 


LAKES-TO-THE-GULF    WATERWAY.  817 

Division  of  Rail- Water  Rates. 

In  the  carriage  of  freight  between  Chicago  and  New 
York — by  water  to  Buffalo,  and  rail  thence  to  New 
York — the  boats  receive  one-third  and  the  cars  two- 
thirds  of  the  through  rate,  the  boat  mileage  being  double 
that  of  the  car.  In  round  numbers  the  railroad  ton- 
mileage  is  about  one-quarter  that  of  the  entire  lake  sys- 
tem, while  the  freight  charge  is  more  than  double,  show- 
ing a  ratio  of  over  8  to  1  for  general  traffic  in  favor  of 
water  transportation. 

It  is  not  the  intention  here,  nor  should  it  be  tolerated 
for  a  moment  anywhere,  to  draw  invidious  distinctions 
between  the  barge  and  the  freight  car.  They  are  both 
of  equal  importance  to  the  wealth  and  advancement  of 
the  whole  country.  Each  has  its  proper  sphere  in  the 
world's  trade.  Highly  finished  products,  perishable 
goods  and  those  requiring  rapid  transit  will  invariably 
seek  conveyance  by  rail,  while  coarse,  bulky  and  durable 
merchandise  may  be  content  with  the  slower  and  cheaper 
carriage  that  is  furnished  by  water  routes.  There  is 
traffic  enough  for  the  railroads  and  the  waterways  and 
the  more  there  are  of  these  built  and  improved  the 
greater  will  be  the  demand  upon  them  for  the  con- 
veyance of  the  products  of  farms  and  factories  to  the 
markets  of  the  world. 

Rate  Barrier  on  Trade. 

There  is  no  section  of  the  United  States  so  densely 
populated  and  with  so  varied  and  extensive  a  commerce 
as  the  Middle  West  that  is  in  so  great  and  pressing  need 
of  cheaper  transportation  facilities.     There  is  hardly 


818  LAKES-TO-THE-GULF    WATERWAY. 

a  wholesale  merchant  or  manufacturer  in  the  West  who 
does  not  find  himself  barred,  by  practically  prohibitory 
railroad  freight  rates,  from  and  to  the  territory  South 
of  the  Ohio  River.  The  people  of  that  section  are  as 
anxious  to  establish  reciprocal  trade  relations  with  the 
West  as  the  merchants  of  that  section  are  to  deal  with 
them.  Practically  the  same  restrictions  are  placed  upon 
the  Southwest  sections  of  the  country.  These  barriers 
have  been  growing  year  by  year  in  solidity  and  height 
until  the  efforts  to  remove  them  have  been,  practically, 
abandoned,  and  relief,  if  it  comes  at  all,  must  be  ob- 
tained through  the  construction  or  the  improvement  of 
waterways,  a  subject  that  is  receiving  the  support  of  the 
people  in  all  of  the  sections  mentioned. 

It  is  only  fair  to  explain  that  these  high  railway  rates 
are  in  great  degree  unavoidable.  It  costs  money  to 
construct  and  equip  and  operate  a  railway,  and  natu- 
rally the  rates  must  be  higher  than  over  a  water  route, 
which  is  furnished  free  of  charge.  But,  as  previously 
explained,  no  matter  how  fair  these  railway  rates  may 
be  when  considered  from  the  point  of  service  rendered, 
there  is  a  limit  beyond  which  producers  cannot  afford 
to  pay  them  on  low-priced  goods. 

How  the  Producer  Is  Affected. 

It  may  be  possible,  for  instance,  for  an  agriculturist 
or  a  manufacturer  to  ship  his  product,  say  500  miles, 
and  make  a  fair  profit  at  a  given  rate.  But  the  rate, 
while  it  may  be  only  a  living  one  for  the  railway,  puts 
the  limit  of  the  territory  in  which  the  producer  can  do 
business  at  500  miles.    Beyond  that  he  cannot  go,  at  the 


LAKES-TO-THE-GULF    WATERWAY.  319 

same  proportionate  rate,  without  losing  his  profit  or 
entaihng  an  actual  loss. 

The  effect  of  this  restraint  of  trade  between  the  North 
and  South  is  illustrated  by  the  conditions  at  Cincinnati. 
That  city,  admirably  situated  to  extend  its  trade  across 
the  Ohio  River  to  the  South,  is  held  in  check  by  its 
inability  to  exchange  its  own  products  for  those  of  its 
Southern  neighbors,  owing  to  the  lack  of  cheap  trans- 
portation. The  depressing  effect  of  this  restrictive  con- 
dition shows  itself  in  the  fact  that  between  1890  and 
1900  the  increment  of  population  in  Cincinnati  was  less 
than  10  per  cent,  while  the  number  of  its  manufacturing 
estabhshments  and  the  value  of  their  finished  products 
very  perceptibly  declined.  It  is  believed  that  nothing 
except  natural  waterways  will  restore  the  free  and 
healthful  commercial  conditions  that  should  exist  be- 
tween the  Northwest  and  the  Southern  States.  This  is 
not  because  the  railways  are  overcharging,  but  because 
the  business  will  not  stand  the  present  transportation 
expense. 

Effects  of  Cheap  Transportation. 

The  direct  and  positive  effects  of  cheap  transporta- 
tion upon  the  people  and  the  prices  they  receive  for  their 
products  and  pay  for  such  as  they  import,  are  clearly 
illustrated  by  the  State  of  Ohio.  In  a  History  of  the 
Ohio  Canals,  published  by  the  Ohio  State  Archaeo- 
logical and  Historical  Society,  the  following  declaration 
is  made: 

"At  the  time  the  canals  were  begun  wheat  was  selling 
at  from  20  to  30  cents  a  bushel  in  the  interior  of  Ohio; 
corn  10  to  12  cents,  and  often  lov/er.    The  farmer  could 


320  LAKES-TO-THE-GULF    WATERWAY. 

with  difficulty  raise  money  to  pay  his  taxes  while  the 
produce  of  his  farm  was  literally  rotting  in  his  yards 
for  the  want  of  a  market.  Before  the  canals  were  con- 
structed it  was  no  uncommon  thing  for  a  man  to  raise 
twenty  bushels  of  wheat  upon  a  new  farm,  spend  a 
week  with  his  team  conveying  it  to  market  and  receive 
in  return  for  his  labor  two  barrels  of  salt.  The  canals 
changed  this.  The  price  of  wheat  rose  to  50  and  75 
cents  a  bushel  in  the  center  of  the  State,  and  the  prices 
of  other  products  in  proportion,  while  many  articles  of 
importation,  including  some  of  the  most  important 
necessaries  of  life,  were  greatly  reduced  in  price.  These 
benefits  were  not  confined  to  the  immediate  vicinity 
of  the  canals,  but  extended  their  influence  more  than 
one  hundred  miles  away.  The  canals  opened  new  chan- 
nels of  intercommunication  between  different  sections 
of  the  State,  furnishing  new  avenues  of  foreign  trade, 
enabling  citizens  of  Ohio  to  place  their  produce  in 
Eastern,  Northern  and  Southern  markets  at  an  expense 
so  greatly  diminished  that  the  value  of  the  commodities 
at  home  increased  from  25  to  100  per  cent.'* 

What  the  Waterway  Means. 

It  is  asserted  that  the  completion  of  the  Lakes-to-the- 
Gulf  deep  waterway  and  the  improvement  of  the  upper 
Mississippi  will  bring  the  Middle  West  into  direct  and 
close  communication  with  the  republic  of  Cuba  and  the 
entire  group  of  West  Indian  islands,  composing  the 
Greater  and  Lesser  Antilles,  with  more  than  4,000,000 
inhabitants,  which  are  separated  from  our  southern 
boundary  by  the  Gulf  of  Mexico.  In  addition  to  these^ 
and  leaving  out  of  consideration  the  broader  extension 


LAKES-TO-THE-GULF    WATERWAY.  321 

that  has  followed  the  completion  of  the  Panama  Canal, 
this  improvement  would  immediately  open  to  the  Mid- 
dle West  the  ports  of  six  of  the  ten  South  American 
republics  and  those  of  five  of  the  six  states  of  Central 
America,  the  eleven  having  an  aggregate  population  of 
more  than  35,000,000  and  an  area  twice  that  of  the  con- 
tinental portion  of  the  United  States.  If  we  add  to  this 
that  large  section  of  the  Mexican  repubhc  that  is  sup- 
pUed  through  the  Gulf  port  of  Vera  Cruz,  it  is  plain  to 
be  seen  that  the  demands  that  would  be  made  upon  the 
Middle  West  for  its  products  would  be  far  in  excess 
of  its  present  ability  to  meet  and  supply. 

Magnitude  of  South  American  Trade. 

The  people  of  the  South  American  countries  are  pur- 
chasers of  the  products  of  the  United  States  to  the 
extent  of  $40,000,000  annually,  while  our  purchases 
from  them  are  considerably  more  than  double  that 
amount.  Under  present  conditions  of  intercommuni- 
cation between  the  two  continents  it  is  practically  im- 
possible to  increase  either  our  exports  or  imports  or 
the  volume  of  trade  between  North  and  South  America. 
There  trade  restrictions  bear  more  heavily  upon  the 
Middle  West  than  upon  any  other  portion  of  the 
country. 

With  direct  water  communication  between  the  heart 
of  the  American  continent  and  South  and  Central 
America,  so  that  vessels  loaded  at  Havana,  La  Guira, 
Vera  Cruz,  San  Juan,  Georgetown,  Bahia,  Rio  Janeiro, 
Buenos  Aires  or  Montevideo  may,  without  breaking 
bulk,  discharge  their  cargoes  at  ports  on  the  shores  of 
the  upper  Mississippi  and  the  Great  Lakes,  it  is  hardly 

I.B.L.     Vol.  8—21 


822  LAKES-TO-THE-GULF   WATERWAY. 

possible  to  form  any  estimate  of  the  impetus  that  would 
be  given  to  the  Central  West  nor  of  the  strength  and 
support  it  would  be  enabled  to  give  to  the  government 
and  the  nation  of  which  it  now  forms  an  important  part. 
Manufacturing  centers  rivaling  those  in  New  England 
would  spring  up  in  every  State  of  the  Middle  West. 

Will  Aid  Panama  Canal. 

By  August  14,  1914,  the  Panama  Canal  had 
been  excavated  wide  and  deep  enough  to  permit 
all  but  vessels  of  a  very  large  size  to  pass  through, 
and  on  that  date  the  canal  was  opened  for 
general  traffic.  Now  that  work  is  finished, 
its  success  as  a  financial  undertaking  will  depend  in 
the  main  upon  the  resources  of  the  Middle  West.  The 
relations  between  the  two  must  be,  in  the  very  nature  of 
things,  reciprocal.  The  canal  will  confer  as  great  bene- 
fits upon  the  West  as  that  section  will  upon  the  inter- 
oceanic  highway.  The  extent  of  all  these  advantages 
will  depend  solely  upon  the  facilities  for  bringing  the 
products  of  the  upper  Mississippi  Valley  to  the  Gulf 
of  Mexico. 

These  products  are  such  as  naturally  seek  water 
transportation;  they  are  too  bulky  and  too  sensitive  to 
rates  of  transportation  to  be  profitably  carried  by  rail. 
In  the  western  tier  of  States  forming  the  Central  West, 
Minnesota,  the  two  Dakotas,  Iowa,  Nebraska  and  Kan- 
sas, the  exportable  products  are  almost  wholly  gDain 
and  provisions,  but  while  the  other  States  of  the  section 
slijp  large  quantities  of  those  commodities  they  also 
export  large  consignments  of  machinery ;  wooden  ware : 
sash,  doors  and  blinds ;  wagons ;  boots  and  shoes ;  canned 


LAKES-TO-THE-GULF    WATERWAY.  323 

products,  and  various  kinds  of  other  manufactured 
goods  for  which  a  demand  has  been  created  both  in  the 
foreign  and  domestic  markets.  To  reach  Mexico  these 
goods  are  frequently  sent  by  way  of  San  Francisco  and 
sometimes  via  New  York. 

Present  Round-About  Route, 

Shipments  to  Central  America,  or  the  western  coast 
of  South  America,  go  to  New  York  and  thence  to 
Panama.  For  Hawaii  the  shipments  are  via  San  Fran- 
cisco or  New  York  and  then  around  Cape  Horn.  The 
carriage  of  these  heavy  products  by  rail  half  way  across 
the  continent  to  tide  water  imposes  a  tax  upon  the  indus- 
trial energy  and  commercial  advancement  of  the  Middle 
West  that  is  a  serious  check  on  the  growth  of  the  entire 
section.  In  many  cases  it  is  a  prohibitory  bar  to  com- 
mercial relations  between  the  Central  West  and  all 
foreign  markets. 

With  water  transportation  to  the  Gulf  of  Mexico, 
the  Middle  West  would  be  able  to  compete  successfully 
with  manufacturers  on,  or  near,  the  coasts,  a  rivalry 
in  which  the  West  would  have  little  to  fear.  Nothing 
better  illustrates  the  situation  at  the  West  or  voices  a 
sentiment  that  is  more  universal  than  the  declaration 
made  in  the  Government  Report  on  the  Isthmian  Canal 
that  "whatever  affects  the  transportation  facilities  of 
the  Central  West  touches  its  economic  life  at  the  very 
center." 


"The  canals  not  only  saved  money  to  the  people  of 
the  State  by  raising  the  price  of  their  products  and  low- 
ering the  cost  of  what  they  imported;  they  stimulated 
production  and,  consequently,  increased  exportation." — 
Report  of  State  of  Ohio  on  History  of  State  Canals, 


"Confidence  is  such  an  important  element  in  the  busi- 
ness of  the  country  that  it  cannot  be  seriously  disturbed 
without  such  disturbance  being  reflected  in  every  branch 
of  commercial  and  manufacturing  activity." — W.  C, 
Brown,  President  New  York  Central  Lines, 


FOREIGN 
TRADE 


"The  possibilities  of  controlling  rates  and  character  of 
service  in  such  a  way  as  to  realize  the  fullest  benefits  for 
the  public  are  conditioned  largely  upon  the  form  of  fran- 
chise. We  have  to  deal  with  three  general  forms  in  the 
United  States — ^the  unlimited,  the  indeterminate  and  the 
term." — Dr,  Frederic  W.  SpeirSj  Philadelphia. 


"It  is  no  part  of  the  purpose  of  this  legislation  to 
oppress  or  add  burdens  to  the  business  enterprises  of  the 
country,  but  rather  to  promote  the  welfare  of  both  em- 
ployer and  employe  by  adjusting  the  losses  and  injuries 
inseparable  from  industry  and  commerce,  to  the  strength 
of  those  who  in  the  nature  of  the  case  ought  to  share  the 
burden." — The  Hon,  J,  P.  Dolliver,  United  States 
Senator  from  Iowa, 


CHAPTER  XX. 

VESSELS  IN  FOREIGN  TRADE. 

In  the  fiscal  year  ending  June  30,  1915,  the  foreign 
merchandise  trade  of  the  United  States  amounted  to 
$4,442,759,080.  In  addition  to  tliis,  we  handled  $397,- 
845,413  in  gold  and  silver,  making  a  total  trade  of 
$4,840,604,493.  On  the  merchandise  account  there 
was  a  balance  in  our  favor  of  $1,094,419,600.  In  other 
words,  we  sold  considerably  more  than  a  billion  dollars' 
worth  of  goods  more  than  we  bought. 

The  conditions  imder  which  this  immense  business  is 
transacted  form  one  of  the  most  interesting  and  impor- 
tant chapters  in  the  history  of  transportation.  The  sys- 
tem, under  Federal  supervision,  is  so  well  organized  and 
regulated  that  everything  moves  like  clockwork,  and, 
despite  the  enormous  volimie  of  business,  there  is  vir- 
tually no  serious  delay  or  annoyance. 

Outline  of  the  System. 

The  great  bulk  of  merchandise  coming  into  this  coun- 
try— the  imports — ^is  subject  to  an  import  or  customs 
duty,  and  to  assist  in  the  collection  of  this  the  Federal 
government  maintains  103  customs  stations.  Of  these, 
thirty-two  are  located  on  the  Atlantic  coast,  eleven  on 
the  Pacific,  nine  on  the  Gulf,  five  on  the  Mexican  bor- 
der, twenty-four  on  the  Northern  frontier  (principally 
on  the  great  lakes) ,  and  twenty-two  at  interior  towns. 

827 


328  VESSELS    IN    FOREIGN    TRADE. 

All  the  stations  on  the  Atlantic,  Pacific  and  Gulf 
and  most  of  those  on  the  great  lakes  are  ports  of  entry 
and  clearance  for  vessels  in  the  foreign  trade.  Those  on 
the  Mexican  border  are  maintained  so  as  to  regulate  the 
overland  commerce,  while  the  stations  in  the  interior 
cities  are  merely  for  the  accommodation  of  those  who 
find  it  more  convenient  to  pay  the  duties  at  these  points 
than  at  the  ports  of  entry. 

Ships  Must  Have  Their  Papers. 

All  vessels  engaged  in  traffic  on  the  high  seas  must 
have  their  papers.  Lack  of  these  papers,  showing  the 
legitimacy  of  the  vessel  and  its  traffic,  renders  the  craft 
liable  to  detention  and  fine  by  the  authorities  of  any 
port  in  which  it  may  seek  refuge,  and  even  to  seizure 
and  confiscation  in  time  of  war. 

All  civilized  nations  engaged  in  maritime  commerce 
keep  an  official  record  of  the  vessels  flying  the  flags  of 
the  respective  countries.  Thus,  England  keeps  a  record 
of  all  vessels  flying  the  British  flag,  the  United  States 
of  those  which  fly  the  American  flag,  etc. ;  and  the  ma- 
rine law  is  such,  the  world  over,  that  a  vessel  must  use  the 
flag  of  the  country  in  which  it  is  registered. 

When  Certificate  Becomes  Void. 

In  case  of  the  loss  of  a  vessel  by  wreck,  storm  or 
other  disaster,  the  certificate  of  registry  becomes  void, 
and,  if  preserved,  must  be  delivered  to  the  customs 
authorities.  In  case  the  whole  or  any  part  of  the  vessel 
is  sold  to  a  foreigner,  the  certificate  lapses  and  must  be 
surrendered  to  the  collector  of  the  port  in  the  United 
States  where  the  master  of  such  vessel  may  land. 


VESSELS    IN    FOREIGN    TRADE.  329 

When  a  registered  vessel  is  sold,  either  in  whole  or 
in  part,  it  must  be  registered  anew  even  though  the 
purchaser  be  a  citizen  of  the  United  States.  New  reg- 
istry will  not  be  made  unless  a  proper  bill  of  sale  is  ex- 
hibited to  the  collector.  Failure  to  surrender  the  orig- 
inal certificate  is  punishable  by  a  fine  of 


Vessels  Entitled  to  Registry. 

Every  country  naturally  formulates  its  marine  laws 
with  the  purpose  of  encouraging  and  enlarging  its  ship- 
ping. In  the  United  States,  for  instance,  certain  allow- 
ances are  made  on  the  tonnage  tax  for  vessels  of  Amer- 
ican registry.  The  vessels  which  are  entitled  to  this 
registry  are : 

Those  built  in  the  United  States  and  wholly  owned 
here.  A  vessel,  although  built  in  the  United  States, 
in  which  a  foreigner  holds  any  monetary  interest,  is  not 
entitled  to  American  registry,  and  can  not  legally  fly 
the  American  flag. 

Vessels  captured  by  a  citizen  of  the  United  States 
in  a  war  to  which  the  United  States  is  a  party,  which 
have  been  lawfully  condemned  as  prizes  and  bought  by 
a  citizen  of  this  country.  Under  this  clause  a  foreign- 
built  vessel  may  obtain  American  registry,  provided 
the  conditions  are  complied  with. 

Protection  Given  to  Registry. 

Registry  is  a  valuable  right,  especially  in  time  of 
war.  Let  us  assume  that  France  and  England  are  at 
war.  The  fighting  vessels  of  one  country  will  naturally 
try  to  capture  the  merchantmen  of  the  other,  confis- 
cating both  vessels  and  cargoes.    But  craft  flying  the 


830  VESSELS    IN    FOREIGN    TRADE. 

American  flag,  or  that  of  any  other  non-belligerent 
country,  will  not  be  molested  so  long  as  they  can  show 
legitimate  registry  under  the  flag  they  are  flying. 

The  mere  flying  of  a  certain  flag  carries  no  signifi- 
cance or  protection,  unless  the  master  of  the  craft  can 
substantiate  his  declaration  by  flag  with  the  proper 
documents.  It  would  be  easy  for  any  master  to  hoist 
an  American  flag  in  time  of  trouble,  but  it  would  do 
him  little  good  if  he  were  unable  to  produce  papers 
which  would  pass  inspection. 

Plain  Marks  of  Identification. 

There  are  certain  links  of  identification  between  a 
ship's  papers  and  the  ship  itself.  The  United  States 
laws  provide  that  the  vessel's  net  tonnage  as  stated  in 
the  certificate  of  registry  must  be  indelibly  carved  or 
marked  on  the  main  beam;  the  draught  must  be  re- 
corded on  the  stem  and  sternpost;  the  official  number 
of  the  vessel  must  be  permanently  carved,  branded  or 
painted  on  the  main  beam;  the  full  name  of  the  craft 
must  be  carved,  gilded  or  painted  on  each  side  of  the 
bow  in  letters  at  least  four  inches  in  length;  the  name 
and  port  of  registry  must  be  similarly  placed  on  the 
stern,  and  all  steam  vessels  must,  in  addition,  bear  their 
name  in  six-inch  letters  on  each  side  of  the  wheelhouse. 

All  of  these  marks  must  be  duplicated  in  the  registry 
so  that  comparison  of  the  vessel  with  the  papers  will 
afford  ample  means  of  identification. 

Changing  of  Vessel  Names, 

Change  of  name  is  discouraged  by  the  authorities 
and  made  as  difficult  as  possible.  When  a  change  is 
desired,  apphcation  must  be  made  to  the  Commissioner 


VESSELS    IN    FOREIGN    TRADE.  331 

of  Navigation,  must  show  the  reason  for  the  desired 
change,  and  estabhsh  the  fact  that  the  vessel  is  not 
over  twenty  years  old.  If  the  craft  is  between  ten  and 
fifteen  years  old,  repairs  to  the  amount  of  not  less  than 
forty  per  cent,  of  the  original  cost  must  have  been 
made;  if  between  fifteen  and  twenty  years  old,  the 
repairs  must  amount  to  sixty  per  cent,  of  first  cost. 
The  name  which  it  is  desired  to  discard  must  have  been 
in  use  for  at  least  five  years  prior  to  the  application. 
The  name  of  a  mortgaged  vessel  can  not  be  changed 
under  any  condition,  not  even  with  consent  of  the 
mortgagee. 

Strict  Conditions  of  Registry. 

In  addition  to  the  application  and  affidavit  of  the 
owner,  a  certificate  is  also  required  from  the  master 
carpenter  who  built  the  vessel,  before  registry  can  be 
obtained.  This  certificate  must  state  time  and  place  of 
building,  person  for  whom  built,  number  of  decks  and 
masts,  length,  depth,  breadth  and  tonnage,  and  such 
other  particulars  as  will  tend  to  make  identification 
easy.  The  time  of  building  is  the  year  of  completion. 
The  place  of  building  is  where  the  hull  was  built. 

If  any  of  the  matters  of  fact  stated  in  the  affidavit 
for  registration  be  false,  the  law  provides  that  there 
shall  be  a  forfeiture  of  the  vessel,  tackle  and  furniture ; 
or  the  value  thereof  may  be  recovered  by  a  suit  at 
law. 

Application  for  registry  is  made  in  the  following 
form: 

I,   ,   of   ,   in   the   county   of 

and  State  of ,  do  swear,  according  to  the  best 


of    my   knowledge    and   belief,   that   the   vessel    called    the 


332  VESSELS    IN    FOREIGN    TRADE. 

of J  is  of  burden tons,  and  was  built  at 

in  the  State  of ,  in  the  year  — 

United    States;    that   my   present   usual    place   of   residence   or   abode   is 

,  in  the  county  of  ,  and  State  of  ; 

that  I  am  the  true  and  sole  owner  of  said  vessel;  that  no  subject  or  citizen 
of  any  foreign  power  is,  directly  or  indirectly,  by  way  of  trust,  confidence, 
or  otherwise,  interested  therein,  or   in  the  profits  or  issues  thereof,  and 

that ,  the  present  master  thereof,  is  a  citizen  of 

the  United  States,  having  been  born  within  the  limits  thereof. 


Sworn  to  and  subscribed  before  me,  this day  of 


Collector. 


Masters  Must  Be  Citizens. 


If  the  master  of  the  vessel  is  not  a  native,  the  appli- 
cation, in  lieu  of  the  statement  that  he  was  born  within 
the  limits  of  this  country,  must  contain  the  following : 

Naturalized  in  the  State  of ^ on  the day  of , 

191 — ,  by  virtue  of  a  decree  or  order  of  the court  of , 

and  the  oath  of  allegiance  according  to  law. 

No  person,  not  a  citizen  of  the  United  States  by  birth 
or  naturalization,  will  be  allowed  to  navigate  or  hold 
any  official  position  on  a  vessel  of  American  registry. 
In  addition  to  the  master  or  captain,  the  various  mates, 
the  chief  and  assistant  engineers,  everybody  who  is  in 
charge  of  a  "watch,"  and  responsible  for  the  navigation 
of  the  vessel  during  that  "watch,"  must  be  a  citizen  of 
the  United  States. 

An  American  vessel  arriving  at  an  American  port 
with  a  foreigner  occupying  an  official  position  of  au- 
thority on  such  vessel  (except  in  case  of  emergency), 
is  subject  to  a  duty  of  50  cents  per  ton  of  capacity.  This 
on  a  craft  of  2,500  tons'  burthen  would  amount  to  $1,250. 
In  any  event  the  services  of  such  alien  officer  must  be 
dispensed  with  when  the  vessel  reaches  its  home  port. 


VESSELS    IN    FOREIGN    TRADE.  333 

The  "Husband**  of  a  Vessel. 

In  nautical  parlance,  the  managing  owner  of  a  ves- 
sel is  the  "husband"  of  the  vessel,  and  from  this  old- 
time  usage  has  doubtless  sprung  the  custom  of  using 
the  feminine  gender  in  referring  to  vessels.  Among 
sailormen  a  vessel  is  invariably  spoken  of  as  "she"; 
never  as  "he,"  or  "it."  This  term  is  officially  recog- 
nized by  the  United  States  treasury  officials  in  the  cer- 
tificate of  proof  of  ownership,  which  reads  as  follows : 

I^ ^  husband  or  managing  owner,  do  swear 

(or  affirm)  that  the  ship  (or  vessel)  ,  burden  , 

whereof  is  at  present  master,  is   wholly  the 

property  of  a  citizen  or  citizens  of  the  United  States  (or  if  such  be  the 
fact,  of  a  company  duly  incorporated  under  the  laws  of  the  State  of 
,  and  entitled  ). 


Subscribed  to,  etc. 

Deciding  Upon  Tonnage  Capacity. 

The  word  "tonnage"  is  used  in  marine  circles  to  de- 
note the  weight  or  displacement  of  water  by  a  vessel, 
and  also  to  indicate  cargo  capacity.  The  first  definition 
apphes  almost  exclusively  to  naval  craft  and  pleasure 
yachts ;  the  latter  to  vessels  in  the  carrying  trade.  The 
legal  tonnage  of  a  merchant  vessel  is  determined  by  the 
internal  cubical  measurement,  less  certain  reserved 
spaces,  this  cubical  measurement  being  expressed  in 
tons  of  100  cubic  feet  each.  Thus,  a  vessel  with  a  cubical 
measurement  of  100,000  feet  would  have  a  capacity  of 
1,000  tons,  and  would  be  classed  as  being  of  "1,000  tons 
burthen." 

How  Measurements  are  Made. 

In  getting  the  internal  cubical  capacity,  the  experts 
first  measure  the  length  of  the  vessel  on  the  upper  side 


dd4  VESSELS    IN    FOREIGN    TRADE. 

of  the  tonnage  deck  in  a  straight  hne  from  stem  to 
stern  plank.  This  length  is  then  divided,  according  to 
the  size  of  the  vessel,  into  equal  "parts,"  varying  from 
six  for  vessels  of  fifty  feet  in  length  to  sixteen  for  those 
of  250  feet  or  over.  A  craft  150  feet  long  would  be 
divided  into  ten  parts  of  fifteen  feet  each. 

The  measurers  next  take  the  width  measure  at  as 
many  different  points  as  the  length  is  divided  into,  so 
as  to  get  the  accurate  transverse  area,  allowing  for  the 
"swell"  or  "bulge"  of  the  sides  from  bow  to  stern.  One 
measurement  of  width  would  not  do,  because  all  ves- 
sels are  so  constructed  that  there  is  no  two  or  more 
points,  a  few  feet  apart,  where  the  width  measurement 
is  exactly  the  same.  For  a  ship  150  feet  in  length,  ten 
of  these  width  measurements  would  be  taken. 

Getting  at  Total  Tonnage. 

The  next  move  is  to  get  at  the  depth  of  the  hold,  and 
here  again,  owing  to  the  peculiar  shape  of  the  hull — 
deepening  as  it  approaches  the  keel — resort  is  had  to  a 
method  of  subdivision  into  parts  similar  to  that  em- 
ployed in  taking  the  width. 

The  parts  into  which  the  length  is  divided  are  num- 
bered from  No.  1,  beginning  at  the  bow,  and  ending 
with  No.  10,  on  a  150-foot  ship,  at  the  stern.  Having 
the  length,  width  and  depth  of  each  one  of  these  parts, 
the  cubical  area  is  figured  for  each  separately,  and  then 
added  together,  giving  the  total  tonnage  capacity. 

Part  No.  1,  owing  to  the  narrowness  of  the  bow,  will 
be  of  greatly  restricted  tonnage  area.  The  capacity 
of  each  part  will  increase  greatly  until  the  center  or 
"midship"  section  is  reached,  and  then  begin  to  fall  off 


TESSELS    IN    FOREIGN    TRADE.  885 

again  toward  the  stern,  but  not  to  such  marked  degree 
as  in  the  bow. 

Figuring  the  Cargo  Tonnage. 

In  taking  cargo  tonnage  measurements,  the  space 
occupied  by  engines,  boilers,  coal  bunkers,  pilot-house, 
cabins,  etc.,  are  omitted.  The  purpose  is  to  get  actual 
cargo  capacity. 

This  does  not  mean  that  the  spaces  thus  occupied  are 
not  measured.  Their  dimensions  are  taken  and  the 
tonnage  capacity  computed.  This  is  then  subtracted 
from  the  total,  and  the  net  cargo  tonnage  thus  ascer- 
tained. In  the  following  statement  we  have  an  illus- 
tration, taken  from  official  records,  of  how  the  measure- 
ments are  computed : 

Tons.        Tons. 

Under  tonnage  deck 2,669.05 

Chart  house 4.48 

Forecastle 38.06 

Round  houses   64.99 

Excess  hatchways 45.23 

Light  and  air 54.05 

Gross    2,875.86 

Deductions — 

Engines,  boilers,  coal 920.28 

Crew  59.82 

Master   5.09 

Chart  room 4.48 

Boatswain 's  stores 28.75 

1,018.42 

Net  cargo  tonnage 1,857.44 

Beason  for  Exact  Measurements. 

Why  go  to  all  this  trouble?  Why  not  make  an  esti- 
mate as  to  vessel  tonnage,  both  gross  and  net?  Be- 
cause the  figures  must  be  exact,  for  numerous  reasons. 


886  VESSELS    IN    FOREIGN    TRADE. 

One  IS  that  exactitude  in  size  is  an  important  factor  in 
identification.  Another,  and  still  more  important,  rea- 
son is  that,  aside  from  customs  duties  on  the  cargo,  a  tax 
is  collected  from  vessels  on  the  basis  of  tonnage  capacity, 
and  this  capacity  must  be  definitely  stated,  so  no  injus- 
tice will  be  done. 


CHAPTER  XXI. 
WORK  OF  THE  CUSTOM  HOUSE. 

A  very  large  part  of  the  revenues  of  the  Federal 
government  are  collected  in  the  form  of  customs  duties 
on  imported  merchandise.  In  a  recent  year  the  duty 
actually  collected  on  merchandise  entered  for  consump- 
tion was  $282,582,895.  This  did  not  include  merchan- 
dise to  the  value  of  $67,921,293  remaining  in  ware- 
house, pending  its  dispersal  in  the  avenues  of  trade. 

For  the  collection  of  these  customs  duties,  the  Federal 
authorities  maintain  one  of  the  most  thoroughly  organ- 
ized and  intelligently  directed  systems  in  the  world. 
Such  serious  dissatisfaction  as  may  exist  is  directed 
against  alleged  defects  in  the  tariff  act  under  which 
the  customs  duties  are  collected,  rather  than  with  the 
method  of  collection  itself. 

How  Vessels  Make  Clearance. 

At  every  point  along  the  seacoast  where  there  is  a 
harbor  large  enough  to  accommodate  sea-going  vessels, 
the  Federal  government  maintains  a  port  of  entry  and 
clearance.  No  sea-going  vessel  can  legitimately  enter 
or  leave  one  of  these  ports  except  with  the  knowledge 
and  by  the  consent  of  the  local  representatives  of  the 
Treasury  Department. 

The  Ocean  Queen,  let  us  say,  is  about  to  leave  New 
York  for  Hong  Kong,  China,  with  a  cargo  of  railway 

I.B.L.     Vol.  8—22  ^37 


888  WORK    OF    THE    CUSTOM     HOUSE. 

iron.  The  master  must  first  obtain  from  the  collector 
of  the  port  a  clearance  paper.  This  shows,  over  the 
signature  of  the  master,  and  verified  by  the  collector, 
the  name  of  the  vessel,  name  of  master,  date  of  sailing, 
nature  of  cargo,  and  ports  of  sailing  and  destination. 
The  master  must  also  obtain  from  the  collector  a  clean 
bill  of  health  as  to  the  sanitary  condition  of  the  vessel 
and  crew,  and  a  copy  of  the  articles  under  which  the 
crew  is  shipped  for  the  voyage. 

Should  the  Ocean  Queen  be  diverted  en  route  from 
the  legitimate  purposes  of  its  voyage;  should,  for  in- 
stance, its  cargo  of  railway  iron  turn  out  to  be  muni- 
tions of  war  for  some  insurgent  force,  the  master  and 
owners  of  the  vessel  would  get  into  serious  trouble  with 
the  authorities. 

In  case  a  vessel  clearing  for  Hong  Kong  is  found 
headed  for  Lima,  Peru,  without  reasonable  excuse,  it 
is  the  custom  to  treat  the  master  as  a  pirate  who  intends 
to  steal  the  ship  and  cargo,  or  engage  in  some  other 
illegal  act. 

Use  of  Clearance  Papers. 

When  a  vessel,  either  in  the  coastwise  or  foreign 
trade,  enters  an  American  port,  it  is  visited  at  once 
by  an  official  known  as  a  boarding  officer.  The  master 
delivers  to  this  officer  one  of  the  papers  obtained  at 
the  port  of  sailing.  This  is  known  as  the  ship's  mani- 
fest, and  is  in  form  as  follows : 


Report  and  manifest  of  the  cargo  laden  on  board  of  the 


of ,  whereof is  master,  and  which  is 

of  the  capacity  of  — —  tont,  built  at  • ,  and  owned  by 

,  of ;  as  per  register  granted  at -, 

the  day  of  ,  191  ,  and  bound  for  ;  which 

cargo  was  taken  on  board  at : 


WORK    OF    THE    CUSTOM     HOUSE. 


339 


Marks. 


No. 
Inclusive. 


Packages 

and 
Contents. 


By 
Whom 
Shipped. 


To 

Whom 

Consigned. 


Consignee's 
Residence. 


Port  of 
Destina- 
tion. 


Eetumed  cargo 


Names  of  passengers,  and  description  and  number  of  packages  belonging 
to  them  respectively: 


Vessel  and  cabin  stores; 


Master. 


Endorsement  of  the  Manifest. 


On  delivery  of  the  original  manifest,  the  boarding 
officer,  if  satisfied  that  everything  is  correct,  returns  it 
to  the  master,  first  endorsing  it  as  follows: 

I^ ^  certify  that  the  within  manifest  was  this  day 

produced  to  me  as  an  original  manifest  of  the  cargo  on  board  the 
,  whereof is  master,  from . 

In  witness  whereof  I  have  hereunto  signed  my  name,  this  day 


of 


19- 


In  the  meantime  the  master  has  supplied  the  board- 
ing officer  with  copies  of  the  manifest  for  filing  with  the 
collector  of  the  port.  These  copies  are  also  endorsed 
by  the  boarding  officer,  who  certifies  that  he  has  com- 
pared them  with  the  original  and  finds  them  to  agree. 
All  this  is  preliminary  to  the  arrival  at  wharf  or  anchor- 
age at  the  port  of  entry. 

Arrival  at  the  Wharf, 

On  arrival  at  the  wharf,  the  master  must,  within 
twenty-four  hours,  on  pain  of  a  $1,000  fine,  file  with  the 
collector  of  the  port  the  original  manifest.    This  must 


340  WORK    OF    THE     CUSTOM     HOUSE. 

be  accompanied  by  a  certificate  from  the  health  officer 
of  the  port,  showing  that  vessel,  cargo,  passengers  and 
crew  are  free  from  contagious  or  infectious  disease. 

Permission  is  then  given  the  master  to  unload,  and 
the  cargo  is  put  out  on  the  wharf.  As  it  is  unladen, 
customs  inspectors  check  over  the  various  items  and 
compare  them  with  the  ship's  manifest.  Articles  on 
which  there  is  no  duty  may  be  removed  at  once ;  those 
that  are  dutiable  are  examined  closely  by  the  inspectors 
to  see  that  they  agree  in  quality  and  quantity  with  the 
manifest. 

Limit  to  Unloading  Time. 

Vessels  are  limited  by  custom-house  regulation  as 
to  the  time  allowed  for  unloading.    The  limit  is: 

Vessels  of  less  than  500  tons,  10  working  days  after 
entry. 

Between  500  and  1,000  tons,  15  days. 

Between  1,000  and  1,500  tons,  20  days. 

Vessels  of  1,500  tons  and  over,  25  days. 

If  any  merchandise  remains  on  board  a  vessel  at  the 
expiration  of  this  limit,  it  is  the  duty  of  the  collector  to 
take  possession  of  it.  In  computing  working  days,  legal 
holidays  and  stormy  weather  are  excluded. 

All  declarations  of  goods  liable  to  duty  should  be 
accompanied  with  the  original  invoices  showing  nature 
of  goods,  quantity,  quality  and  price. 

How  eoods  Are  Imported. 

Large  orders  for  foreign  goods  are  sent  to  European 
houses  either  direct  by  correspondence  or  through  New 
York  commission  merchants  who  make  a  specialty  of 


WORK   OF   THE   CUSTOM    HOUSE.  84il 

import  trade.  The  largest  American  importers  hare 
men  whom  they  call  their  foreign  buyers.  These  go 
abroad  at  certain  seasons  and  make  purchases  direct 
from  European  houses.  They  simply  buy  the  goods — 
that  is,  order  them — and  leave  the  shipping  and  all  the 
routine  connected  therewith  to  the  seller. 

When  the  goods  are  ready  for  shipment,  the  foreign 
house  makes  out  an  invoice — three  copies.  These  are 
taken  to  the  office  of  the  nearest  United  States  consul 
and  an  oath  is  taken  to  the  effect  that  the  particulars 
and  prices  are  absolutely  as  stated.  This  precaution  is 
to  prevent  fraud.  A  foreign  merchant  might  be  in 
collusion  with  an  American  importer  and  invoice  goods 
at  a  value  lower  than  their  actual  price  to  reduce  the 
amount  of  duty  to  be  paid  at  the  American  port  of 
entry.  The  consul  files  one  copy  of  the  invoice;  the 
second  he  sends  to  the  custom  house  where  the  goods 
are  to  be  entered ;  and  the  third  is  returned  to  the  ship- 
per. The  cases  are  forwarded  to  the  seaport  town, 
where  a  bill  of  lading,  also  in  triplicate,  is  issued  by  the 
ship  or  her  agents.  The  invoice,  the  bill  of  lading,  and 
the  consul's  certificate  are  mailed  to  the  consignee  at  the 
port  of  destination. 

The  Custom-House  Routine. 

Upon  arrival  of  the  goods,  the  consignee  usually 
takes. the  papers  to  his  custom-house  broker,  who  for  a 
moderate  fee  does  the  necessary  routine  work  of  passing 
the  goods  at  the  custom  house.  The  consignee  may  save 
this  expense  by  attending  to  the  matter  himself,  but 
usually  he  finds  it  a  saving  of  expense  as  well  as  of  time 
to  allow  a  broker  to  do  the  work  for  him.    If  he  wishes 


342 


WORK    OF     THE    CUSTOM     HOUSE. 


to  pay  the  duty  immediately,  he  makes  what  is  known 
as  a  cash  entry.  If  he  does  not  require  the  goods  imme- 
diately, he  may  make  a  warehouse  entry.  When  the 
latter  is  done,  the  duty  need  not  be  paid  until  the  goods 
are  taken  from  the  bonded  warehouse.  The  cases  may 
be  taken  in  lots  at  different  times  at  the  convenience  of 
the  importer.  In  the  entry  of  goods  for  a  bonded  ware- 
house the  government  requires  a  bond  from  the  im- 
porter, with  a  surety  that  he  will  pay  the  duty  vidthin 
three  years,  or  export  the  goods  to  some  other  country. 


Consumption  Entry. 


Entry    of    merchandise    imported    by 


day  of 


master,    from 


in    the 
on    the 


§ 

0) 

w5 

1 

3 

Packages 
fications  see 

and   contents, 
accompanying 

(For 
invoice 

speci- 

3 

5:  rt 

:3  d 

<L> 

a 

^ 

'i^ 

a 

i> 

Q> 

« 

Q 

Entered  at  port  of 


day  of 


(Importer's  signature.) 


When  goods  are  consigned  to  the  interior  of  the 
United  States — ^that  is,  to  cities  or  towns  which  are  not 
ports  of  entry,  they  can  be  sent  from  the  port  of  ship- 
ment to  the  port  of  entry,  and  then  forwarded  in  bond 
to  the  point  of  destination.  The  invoice,  bill  of  lading, 
and  other  papers  are  sent  to  the  custom-house  broker 
at  a  port  of  arrival  where  the  custom-house  entries  are 
made  and  the  goods  trans-shipped.    The  bill  of  lading 


WORK    OF    THE     CUSTOM     HOUSE 


should  read,  "In  bond  to 
tion  may  be. 


848 

,"  wherever  the  destina- 


Examination  of  Imported  Croodis, 

When  the  goods  are  discharged  from  the  vessel,  they 
are  sent  to  what  is  known  as  the  United  States  ap- 
praiser's stores  for  examination.     Here  the  examiners 

Entry  for  Warehouse. 

Custom-House,  , 

Port  of , . 

Entry  for  Trarehouse  of  merchandiie  imported  by 


in  the 


-,  master,  from 


on 


the 

-  day  of  ,  . 

3 

s 

O  gt 

Packages     and     contents. 

.^^ 

^ 

So 

>  ca 

CO 

u 

(For    specifications  see  ac- 

>» 

> 

(t> 

0) 

•i 

companying  invoice.) 

> 

G 

H- 1 

P4 

(Signature  of  importer.) 


have  the  cases  opened  and  compare  the  goods  to  see  if 
they  correspond  with  the  invoices,  and  that  the  prices 
are  correct.  Should  the  appraiser  deem  the  goods  rated 
wrong,  he  returns  the  invoice  to  the  collector's  office, 
where  the  matter  is  adjusted,  and  notice  of  the  addi- 
tional duty  necessary  is  sent  to  the  importer.  Should 
the  importer  consider  that  he  has  been  unfairly  treated 


344 


WORK    OF    THE    CUSTOM     HOUSE. 


he  has  redress  by  formal  protest  to  the  board  of  govern- 
ment appraisers.  If  this  board  decides  against  him  he 
can  sue  the  collector  and  bring  the  matter  before  the 
United  States  Court. 


Entry  Blank. 

Bond  No.  . 


District  of 


Port  of 


Entry  of  merchandise  to  be  rewarehoused  and  withdrawn  for  immediate 
consumption  by  ,  which  wat  brought  into  this  dis- 
trict on  the  day  of  ,  ,  by  , 

,  on  the  (route  or  vessel),  having  been  orig- 

by ^  in  the , 


from  the  port  of  — 

inally  imported  into 

from  ,  on  the 


day  of 




*+•> 

(A 

Packages  and  Con- 

>^ 

§ 

tents. 

r^ 

c 

C 

H 

■g 

c 

S^ 

^ 

1 

n 

0) 

o 
u 

"rt 

1^^ 

^ 

d 

a> 

a> 

i> 

a> 

<L> 

o 

^'^ 

:^ 

^ 

a 

fl. 

CL. 

Ph 

^ 

Ph 

H 

Consigned  to 


Penalties  for  Fraud,  Etc. 

Should  the  appraiser  consider  that  the  goods  have 
been  invoiced  at  too  low  a  figure,  he  can  advance  the 
same  to  what  he  considers  right.  If  this  advance  is 
over  ten  per  cent.,  a  penalty  fine  (as  may  be  prescribed 
by  law)  is  charged,  and  if  the  advance  is  over  forty  per 
cent.,  the  case  is  presumed  to  be  one  of  fraud,  and  the 
goods  may  be  confiscated. 


WOEK    OF    THE    CUSTOM     HOUSE.  846 

Every  entry  has  to  be  sworn  to  by  a  member  of  the 
importing  firm,  before  the  collector  or  one  of  his  depu- 
ties. If  it  is  not  convenient  for  a  member  of  the  import- 
ing firm  to  do  this,  then  his  agent,  who  holds  power  of 
attorney,  makes  oath,  and  gives  a  bond  for  the  produc- 
tion of  the  importer's  declaration  at  some  subsequent 
time.  When  a  consignee  receives  his  bill  of  lading,  but 
no  invoice,  he  can,  where  the  value  is  less  than  $100, 
make  what  is  known  as  an  appraisement  entry,  but 
where  the  value  exceeds  $100,  and  he  knows  the  con- 
tents and  prices,  he  can  make  out  a  pro-forma  invoice, 
giving  a  bond  to  the  government  for  the  production 
later  of  a  properly  certified  invoice. 

Imports  for  Exportation. 

Goods  can  be  brought  into  the  United  States  and  im- 
mediately exported  to  Canada,  without  payment  of 
duty,  providing  the  bill  of  lading  states  "For  imme- 
diate exportation,"  or  the  imported  goods  may  be  placed 
in  a  bonded  warehouse  and  exported  any  time  within 
three  years.  The  owner  of  goods  on  which  import 
duties  have  been  paid  is  entitled  to  have  such  duties 
wholly  or  partly  paid  back  if  he  decides  to  export  the 
goods  to  a  foreign  point.  For  instance,  a  merchant 
might  import  $1,000  worth  of  goods  from  England, 
store  them  in  a  New  York  bonded  warehouse,  and  at  his 
convenience  export  them  to  Cuba  or  Brazil  or  some 
other  country.  It  is  evident  that  it  would  be  unfair  to 
pay  the  United  States  duty  when  the  goods  were  not 
for  use  here.  The  amount  refunded  in  such  a  case  is 
called  drawback,  and  is  fixed  by  schedule  approved  by 
the  Secretary  of  the  Treasury.     The  claim  for  draW' 


346  woEK  or  the  custom   house. 

back  must  be  made  before  the  goods  are  shipped  and  in 
such  form  as  the  secretary  may  prescribe.  The  advan- 
tage of  this  system  is  easily  seen  in  the  fact  that  it 
enables  our  merchants  to  compete  with  foreign  traders 
in  business  outside  of  our  own  country. 


CHAPTER  XXII. 

THE  BONDED  WAREHOUSE. 

Dutiable  merchandise  imported  from  foreign  coun- 
tries may  be  stored  in  government  or  private  bonded 
warehouses,  and  the  payment  of  duty  thus  deferred 
for  three  years.  Certificates  or  receipts  issued  against 
merchandise  thus  stored  are  negotiable,  and  an  importer 
may  raise  money  on  these  receipts  while  still  holding 
his  goods  in  store  and  awaiting  a  favorable  market. 

This  bonded  warehouse  system  makes  it  possible  for 
an  American  merchant  to  take  advantage  of  depressions 
in  foreign  markets  by  buying  goods  when  they  are  low, 
and  storing  them  in  this  country  ready  to  take  advan- 
tage of  any  improvement  in  the  home  market. 

Scope  of  Bonded  Warehouse. 

Bonded  warehouses,  both  those  owned  by  the  govern- 
ment and  by  private  companies,  are  under  the  control 
of  custom  house  officials  known  as  government  store- 
keepers. The  storekeeper  carries  the  keys  and  no 
goods  can  be  removed  without  his  consent,  which  is 
given  only  upon  order  from  the  custom  house,  and  not 
then  unless  the  storage  charges  have  been  paid.  Only 
goods  which  are  dutiable  go  into  bonded  warehouses. 
The  warehouse  receipt  given  by  private  warehouse  com- 
panies is  a  negotiable  instrument  and  may  be  used  with 
banks  as  collateral  security  for  money  borrowed,  or  the 

347 


848  THE  BONDED   WAREHOUSE. 

goods  stored  may  be  sold  and  the  storage  receipt  passed 
from  the  seller  to  the  buyer  just  as  would  be  doi\e  with 
a  deed  or  other  instrument  of  value. 

Honesty  Secured  by  Bonds. 

Everybody  connected  with  a  bonded  warehouse  is 
under  bond — ^the  man  who  owns  and  conducts  the  busi- 
ness, and  the  man  whose  team  and  dray  takes  the  goods 
from  the  vessel  to  the  storage  place.  These  bonds  run 
to  the  government  and  are  given  as  a  guarantee  that 
the  business  will  be  honestly  conducted  and  the  duties 
will  be  paid  on  the  imported  goods  entrusted  to  the  care 
of  the  warehouseman. 

When  the  goods  are  being  unloaded  the  ship-master 
gives  a  ticket  with  particulars  of  the  goods  to  the  driver 
of  the  bonded  dray.  Upon  delivery  of  the  goods  to 
the  warehouse  this  ticket  is  turned  over  to  the  store- 
keeper, who  delivers  it  to  the  custom  house.  The  im- 
porter receives  a  delivery  order  for  each  lot  of  goods 
stored.  These  orders  may  be  exchanged  for  a  ware- 
house receipt  just  as  railroad  receipts  may  be  exchanged 
for  a  bill-of -lading.  The  holder  of  the  warehouse  re- 
ceipt has  a  title  to  the  merchandise  it  represents. 

Making  Entry  for  Warehouse. 
,When  an  importer  has  goods  arriving  which  he  de- 
sires to  send  to  bonded  warehouse  entry  for  such  pur- 
pose is  made  ki  the  form  described  in  Chapter  XXI. 

When  the  entry  is  filed  the  custom  officials  pass  the 
designated  goods  to  the  custody  of  the  warehouseman, 
who  from  then  on  is  responsible  to  the  government  for 
their  safe  keeping  until  released  on  the  order  of  the 
collector.     In  return  the  importer  receives  from  the 


THE  BONDED  WAREHOUSE.  349 

warehouseman  a  certificate  acknowledging  receipt  of 
the  goods  and  containing  the  same  description  as  given 
on  the  entry  form. 

Stamping  Value  on  Invoice. 

All  package  goods  sent  to  bonded  warehouse  must 
be  numbered  or  marked  on  the  entry  form  and  in  all 
subsequent  transactions  must  be  referred  to  by  such 
numbers. 

At  the  appraiser's  stores  such  packages  will  be  exam- 
ined and,  if  found  to  agree  with  the  entry  blank  and 
invoice  as  to  quantity,  quality,  etc.,  will  be  passed  on 
to  the  warehouse  for  storage. 

Accompanying  each  consignment  to  a  warehouse  must 
be  an  invoice  showing  the  actual  purchase  price  of  the 
goods.  This  invoice  is  a  duplicate  of  the  bill  issued  by 
the  seller  to  the  buyer  and  must  be  certified  to  by  the 
American  consul  at  place  of  purchase  or  shipment.  On 
this  invoice  the  collector  stamps  the  following  form: 


50% 


D.  L.  Ruth, 

Collector's  Office. 

C.  G.  Clark, 
Naval  Office. 

Entered  value  10,600.00  francs 

Less  nondutiable  charges 450.00  francs 

Add  for  value     1,200.00  francs 

Name  of  vessel  or  transportation  line: 
MAJESTIC. 

Warehouse : 

PEENTICE  STORES. 

I  certify  that  this  invoice  was  presented  to  me  on  entry,  custom- 
house. New  York,  this            day  of             ,  19     . 

Deputy  Collector. 


850  THE  BONDED   WAREHOUSE. 

Punishment  for  Wrong  Valuation. 

If  there  is  any  suspicion  on  the  part  of  the  oifieials 
that  the  goods  have  been  overvalued,  or  wrongly  classi- 
fied, a  rigid  re-examination  will  be  made  by  the  in- 
spector. If  this  second  examination  reveals  ample 
proof  of  wrongdoing  on  the  part  of  the  importer  it  will 
result  in  confiscation  of  the  goods,  and  perhaps  crim- 
inal prosecution  of  the  offender.  If  the  offense  is  slight, 
or  apparently  unintentional,  a  light  fine  may  be 
inflicted. 

While  the  goods  are  in  storage  the  importer  or  his 
representative  may  examine  them,  or  take  reasonable 
samples  at  any  time  during  regular  business  hours,  and 
may  make  any  repairs,  or  do  any  repacking  which  may 
be  necessary,  provided  that  the  original  marks  and  num- 
bers of  the  packages  are  retained. 

Dutiable  Goods  for  Export. 

When  dutiable  goods  are  placed  in  a  bonded  ware- 
house and  later  withdrawn  for  exportation  to  some  for- 
eign country  the  duty  is  cancelled,  and  the  goods  may 
be  withdrawn  on  payment  of  the  storage  charges  only. 
In  an  instance  of  this  kind  the  exporter  makes  the  fol- 
lowing declaration: 

Declaration  on  Export  Withdrawal, 


I, ,  do  solemnly,  sincerely,  and  truly  declare  that 

the  goods,  wares,  and  merchandise  described  in  the  within  withdrawal,  now 

delivered  by  me  to  the  collector  of  the  customs  for  the  port  of ■ — , 

are  truly  intended  to  be  exported  by  me  to  the  port  of  ,  as 

stated   in   said   entry,   and   by  the  vessel   therein   indicated,   and   are  not 
intended  to  be  relanded  or  consumed  within  the  limits  of  the  United  States; 


THE  BONDED  WAREHOUSE.  351 

and  that,  to  the  best  of  my  knowledge  and  belief,  the  said  goods,  wares, 
and  merchandise  are  the  same  in  quality,  quantity,  value,  and  package 
(wastage  and  damage  excepted)  as  at  the  time  of  importation. 

,  Exporter. 

Port  of  . 

Declared  this  day  of ,  ,  before  me. 

,  Collector. 

The  exporter  signs  a  bond  in  double  the  value  of  the 
goods  and  the  collector  then  issues  a  permit  for  the 
withdrawal  of  the  goods. 

Keeping  Track  of  Exported  Goods. 

But  how  shall  the  customs  authorities  know  that  the 
dutiable  goods  are  actually  exported  and  not  consumed 
in  this  country? 

Before  the  bond  can  be  cancelled  the  consignee  at 
the  foreign  port  must  furnish  to  the  collector  at  the  port 
of  clearance  documentary  evidence  of  the  receipt  of 
the  goods.  This  is  to  be  in  the  form  of  a  certificate 
authenticated  by  an  American  consul,  or  some  other 
authorized  person  and  must  be  furnished  within  one 
year,  except  from  Asian  and  African  ports  where  two 
years  is  allowed.  If  this  certificate  is  not  forthcoming 
at  the  proper  time  recourse  may  be  had  on  the  bond. 

Should  failure  to  dehver  be  the  fault  of  the  master 
of  the  vessel  both  he  and  the  vessel  will  be  subject  to 
discipline  in  the  way  of  heavy  fines. 

Eate  of  Warehouse  Charges. 

Some  importers  own  bonded  warehouses  in  which 
they  store  none  but  their  own  goods.  The  majority  of 
warehouses,  however,  are  owned  by  people  who  do  a 
general  storage  business. 

Importers  who  place  goods  in  bonded  warehouses 
must,  of  course,  pay  storage  charges.    That  is  the  way 


352  THE  BONDED   WAREHOUSE. 

the  proprietors  of  these  warehouses  make  their  money. 
The  storage  rates  vary  greatly.  The  space  occupied 
and  the  labor  of  handling  are  the  most  important  con- 
siderations. Flour,  for  instance,  would  cost  about  3 
cents  a  barrel  for  the  first  30  days  and  2  cents  a  barrel 
for  each  succeeding  15  days.  If  a  rate  were  quoted  as 
10  and  8  it  would  indicate  10  cents  for  storage  and  8 
cents  for  labor  for  the  first  period  of  time,  and  10  cents 
for  each  successive  period. 

Bond  Upon  Entry. 

Know  all  men  by  these  presents,  that  we, ,  as 

principals,   and  ,   as   sureties,   are   held  and  firmly 

bound  unto  the  United  States  of  America  in  the  sum  of  ten  thousand  dollars 
for  the  payment  whereof  to  the  United  States  we  firmly  bind  ourselves,  our 
heirs,  executors,  administrators,  and  assigns,  jointly  and  severally,  by  these 

presents,  as  witness   our  hands   and  seals,  at  the  port   of  ,  this 

day  of  ,  nineteen  hundred  and  . 

Wliereas  the  undersigned,  principals  on  this  bond,  propose  to  enter  at 
the  custom-house,  and  to  transport  merchandise  imported  under  the  pro- 
visions of  the  act  entitled  ''An  act  to  expedite  the  delivery  of  imported 
parcels  and  packages  not  exceeding  five  hundred  dollars  in  value, ' '  approved 
June  8,  1896: 

Now,  therefore,  the  conditions  of  this  obligation  are  such  that  if  the 
herein-mentioned  obligors  shall  duly  observe  and  faithfully  comply  with  all 
the  requirements  and  provisions  of  the  above-specified  act,  and  with  the 
regulations  prescribed  by  the  Secretary  of  the  Treasury  thereunder,  then 
this  obligation  to  be  void;  otherwise  to  remain  in  full  force. 

^     (seal.) 

,     (seal.) 

^     (seal.) 

Signed,  sealed  and  delivered  in  presence  of — 


CHAPTER  XXIII. 
ELECTRIC  RAILWAYS  IN  THE  U.  S. 

The  development  of  electric  railways  in  the  United 
States,  which  leads  the  world  in  this  form  of  transporta- 
tion, has  taken  place  within  less  than  thirty  years.  At 
the  date  of  the  last  official  report  there  were  1,260  elec- 
tric street  railway  systems  in  the  country,  employing  a 
total  of  282,461  men  and  representing  an  investment  of 
$4,708,567,141.  So  complete  is  the  network  of  elec- 
tric railways  that  today  one  can  travel  from  Boston  to 
Chicago  with  only  a  few  miles  of  steam  travel  where 
there  are  gaps  yet  to  be  filled. 

The  nmnber  of  miles  of  line  operated  by  the  electric 
railways  was  30,437  miles,  having  41,064  miles  of  single 
track.  The  total  number  of  cars  was  94,016,  including 
76,162  passenger  cars,  the  rest  being  used  for  the  trans- 
portation of  freight  and  express  matter,  and  for  con- 
struction and  repairs,  etc.  There  were  also  277  elec- 
tric locomotives  in  use>  while  the  total  horse-power  of 
all  the  electric  motors  employed  in  transportation  was 
3,665,051. 

Passengers  carried  on  the  electric  roads  during  the 
last  year  for  which  reports  are  available  numbered  12,- 
135,341,716,  and  the  gross  income  of  the  operating  com- 
panies amounted  to  $585,930,517.  The  companies  paid 
dividends  amounting  to  $51,650,117  and  reported  a  sur- 
plus of  $10,260,636. 

353 


354  ELECTRIC  RAILWAYS. 

This  enormous  business  has  been  developed  since  the 
year  1888,  when  the  first  electric  motors  propelling 
street  cars  in  Richmond,  Virginia,  startled  the  people  by 
the  terrifying  flashes  at  the  overhead  "collector"  and 
from  the  motor  brushes.  The  improvements  made  in 
the  various  elements  were  so  rapid  that  soon  the  electric 
motors  not  only  displaced  horses  as  motive  power,  but 
also  led  to  the  extension  of  the  field  of  city  transporta- 
tion. Then  there  followed  the  development  of  many 
thousands  of  miles  of  interurban  electric  lines,  which 
have  brought  the  outlying  farms  close  to  the  cities  in  al- 
most every  locality  east  of  the  Mississippi  River.  This 
network  is  being  steadily  extended  and  will  eventually 
cover  the  entire  country  as  the  density  of  population  in- 
creases. The  effect  of  the  inter-communication  so  af- 
forded is  incalculable,  from  both  an  economic  and  a  so- 
ciological standpoint. 

It  is  interesting  to  know,  in  these  days  when  so  much 
is  heard  about  the  increased  cost  of  living,  that  such  ele- 
ments in  our  daily  lives  as  are  served  by  electricity  have 
steadily  decreased  in  cost  and  today  we  ride  farther  for 
a  nickel  and  have  more  electric  light  illumination  for 
less  money  than  ever  before. 

Equipment  of  Electric  Railways. 

Many  varied  conditions  confront  electrical  engineers 
when  the  question  of  equipping  an  electric  railway  arises 
for  consideration.  In  general  there  are  at  least  six  dif- 
ferent classes  of  service  for  equipment  at  the  present 
time,  viz.,  city,  interurban,  elevated,  subway,  steam  rail- 
way terminal  electrification  and  main  line  railway  elec- 
trification. 


ELECTRIC  RAILWAYS.  355 

The  electrical  equipment  of  city  car  service  may  be 
divided  into  two  classes,  viz.,  two  and  four-motor  equip- 
ments ;  of  trucks,  in  general,  there  are  three  types,  viz., 
single  trucks,  maximum-traction  trucks,  and  double 
trucks.  The  number  of  combinations  that  can  be  made 
when  applying  power  to  the  car  with  these  elements  is 
surprising.  The  proportion  of  the  total  car  weight  on 
the  driving  wheels  largely  determines  the  schedule  pos- 
sibilities and  the  grade-climbing  capacity  of  a  car. 

With  the  single-truck,  two-motor  equipment,  all  the 
weight  is  on  the  driving  wheels;  so  that  this  combina- 
tion would  be  ideal  were  it  not  for  the  fact  that  the  de- 
mands of  seating  capacity  and  riding  quality  put  limita- 
tions on  the  single-truck  car  that  usually  make  it  neces- 
sary to  have  double-truck  equipments. 

With  the  double-truck  car  there  are  many  complica- 
tions which  arise  when  selecting  a  distribution  of  power 
for  the  driving  axles.  A  selection  which  will  give  uni- 
form weights  on  the  wheel  treads  will,  of  course,  give 
the  ideal  car,  for  it  will  reduce  wheel  slippage  to  a 
minimum  under  all  conditions.  With  a  four-motor 
equipment  and  motors  "inside  hung"  it  is  possible  to 
secure  the  nearest  approach  to  equalization  of  the 
weights  on  the  wheel  treads. 

In  addition  to  the  many  combinations  of  motor 
mounting  for  a  single  car,  there  is  trailer  operation  to 
consider  and  also  the  effect  of  these  trailers  on  wheel 
slippage,  both  on  level  track  and  also  on  grades.  An 
analysis  of  the  weight  distribution  on  single-motor  cars 
indicates  clearly  the  reason  for  usually  selecting  four- 
motor  equipments  when  trailer  operation  is  to  be  con- 
sidered.       This  analysis  of  weight  distribution  shows 


356  ELECTRIC  RAILWAYS. 

why,  when  the  grades  to  be  negotiated  are  more  than 
five  per  cent  it  is  the  general  practice  to  use  four-motor 
equipments  for  double-truck  cars. 

There  are  at  least  twelve  to  fifteen  different  combina- 
tions of  mounting  motors  on  the  different  types  of 
trucks  in  general  use. 

After  the  question  of  deciding  how  many  motors  are 
to  be  used  on  a  car,  the  next  factors  to  consider  are  how 
to  get  the  greatest  amount  of  work  out  of  the  motors 
per  pound  of  weight,  how  to  secure  the  motor  that  will 
use  the  least  power,  and  at  the  same  time  to  obtain  an 
equipment  at  a  price  that  will  be  justified  by  the  results 
of  these  savings. 

Changes  in  Car  Wheels  and  Control. 

,  Car  wheels  in  city  service  have  been  for  the  most  part 
of  33-inch  diameter,  but  during  the  last  few  years  there 
has  been  an  increasing  amount  of  interest  exhibited  re- 
garding 24-inch  wheel  equipments  for  city  service. 
Motors  that  are  particularly  efficient  and  well  con- 
structed have  been  designed  for  use  with  these  equip- 
ments. Due  to  the  decreased  weight  of  the  wheels  and 
trucks  as  well  as  to  the  reduction  in  the  weight  of  the 
motors,  this  subject  has  engaged  active  study. 

In  addition  to  the  weight  savings  there  has  also  been 
an  innovation  in  control  which  consists  of  a  change  in 
the  standard  motor  circuit  connections  so  that  three 
running  speeds  are  obtained.  With  this  combination  of 
control  there  is  a  considerable  saving  in  power  con- 
sumption. In  some  cases  a  saving  of  seven  or  eight  per 
cent  may  be  expected.  It  is  necessary,  however,  in  con- 
nection with  this  control  to  carefully  analyze  the  service. 


ELECTRIC  RAILWAYS.  357 

for  experience  has  shown  that  the  heating  is  not  equally 
divided  among  the  four  motors  of  the  equipment. 

Interurban  Railway  Equipment. 

In  the  selection  of  interurban  equipments  the  same 
considerations  in  regard  to  motor  distribution  apply  as 
have  been  mentioned  for  city  cars.  Practically  all 
equipments  in  this  class  of  service  employ  four  motors, 
and  it  is  the  usual  practice  for  the  motors  to  be  inside- 
hung.  There  has  not  been  a  general  adoption  of  field 
control  for  interurban  work  due  to  the  fact  that  as  a 
rule  the  stops,  as  compared  with  city  service,  are  rel- 
atively infrequent  and  therefore  the  savings  which  can 
be  made  with  city  equipments  are  not  so  apparent  in 
the  interurban  equipments. 

Interurban  Roads  and  Carload  Freight. 

Recently  it  has  been  found  that  a  large  number  of 
interurban  roads  have  practically  reached  the  limit  of 
their  earning  power,  as  they  are  securing  all  of  the  busi- 
ness which  there  is  at  the  present  time,  and  the  only  ad- 
ditional business  which  can  come  to  them  is  through  the 
natural  increase  of  business  due  to  the  growth  of  the 
community.  This  has  led  the  management  of  these 
properties  to  carefully  consider  and  to  estimate  the  cost 
of  entering  into  the  business  of  hauling  car-load  freight. 
As  a  result  it  would  not  be  surprising  if  a  large  number 
of  roads  purchase  electric  locomotives  in  the  near  future 
in  order  to  increase  their  earnings  per  mile  of  track.  To 
select  the  motors  for  this  service,  it  has  usually  been  the 
practice  to  start  with  locomotives  weighing  approxi- 
mately 40  tons.    Sometimes  these  units  are  of  the  regu- 


358  ELECTRIC  RAILWAYS. 

lar  locomotive  type  and  sometimes  of  the  baggage-car 
type.  These  units  as  a  rule  are  equipped  with  four 
125-H.P.  motors.  On  some  roads  this  business  has 
grown  to  such  an  extent  that  it  is  necessary  to  use  60-ton 
locomotives,  which  are  usually  equipped  with  four 
225-H.P.  motors. 

Electrification  of  Steam  Roads. 

The  question  is  often  asked,  When  will  our  railroads 
be  operated  by  electricity?  In  a  recent  lecture  by  Dr. 
Steinmetz,  the  electrical  expert,  the  statement  was  made 
that  there  is  more  aggregate  horse-power  in  electric 
motors  operating  cars  and  locomotives  today  than  the 
aggregate  horse-power  capacity  of  all  the  steam  pas- 
senger locomotives  used  for  transportation  in  this  coun- 
try. The  day  has  not  yet  arrived  when  the  universal 
electrification  of  our  steam  railroads  can  be  economically 
accomplished,  but  the  decreasing  cost  of  power  and  the 
lower  cost  of  electric  equipment  for  rolling  stock  are 
gradually  extending  the  field  where  the  application  of 
electricity  to  transportation  is  justified  and  will  eventu- 
ally permit  electricity  to  replace  steam  on  all  important 
railroad  divisions. 

At  present,  said  Mr.  C.  E.  Eveleth,  an  expert 
engineer  of  the  General  Electric  Company,  in  a  lecture 
delivered  in  New  York  City,  we  are  using  electricity  to 
accomplish  results  unattainable  with  steam  engines,  not- 
withstanding the  magnificent  results  which  the  steam- 
engine  designer  has  achieved  with  the  Mallet  locomo- 
tive, oil-fired  boilers,  and  the  use  of  superheated  steam. 
Of  all  known  agents  electricity  is  the  most  convenient 
means  of  distributing  power,  and  its  application  to 


ELECTRIC  RAILWAYS.  35f 

transportation  successfully  overcomes  widely  differing 
conditions  of  limitation.  On  some  railroad  divisions 
about  one-twentieth  of  the  gross  ton-mileage  is  used 
for  hauling  the  coal  to  supply  the  steam  locomotives 
with  fuel ;  on  other  sections,  the  speed  on  going  up-grade 
is  limited  by  the  boiler  capacity  of  the  engines.  The 
operation  in  descending  these  same  grades  is  frequently 
hazardous,  owing  to  the  possibility  of  the  loss  of  air  for 
the  air-brakes,  or  danger  from  overheated  brake-shoes 
and  wheel  tires. 

Applying  electric  locomotives  to  these  conditions,  in 
many  instances,  eliminates  entirely  the  freight  tonnage 
required  to  haul  fuel.  The  speed  of  freight  trains  up 
grade  can  be  increased  to  the  maximum  safe  or  economic 
limit,  and  by  the  use  of  regeneration  the  electrical 
engineer  can  not  only  lessen  the  danger  from  failure 
of  air  for  the  brakes  and  the  heating  of  tires  and  brake- 
shoes,  but  is  also  able  actually  to  recover  a  material  por- 
tion of  the  energy  given  up  by  a  train  descending  a 
mountain  and  to  utilize  this  power  for  ascending  trains. 
Electric  engineering  can  not  only  overcome  the  rail- 
roading difficulties  incident  to  bad  water  in  desert  re- 
gions, but  can  also  transport  the  suburbanite  more 
quickly  to  his  home. 

Other  limiting  conditions  which  can  only  be  met  by 
electric  traction  are  the  elimination  of  smoke,  the  bet- 
ter utilization  of  space  in  city  terminals  by  the  use  of 
different  track  levels,  the  elimination  of  roundhouses, 
and  turn-tables,  and  the  saving  of  time  required  by 
steam  locomotives  while  going  for  water  and  cleaning 
fireSo 


360  ELECTRIC  RAILWAYS. 

Science  of  Electric  Railroading. 

Electric  railroading  may  be  considered  under  two 
broad  divisions,  says  Mr.  Eveleth  in  an  article  based  on 
the  lecture  referred  to  above.  One  may  be  called  the 
"science"  arid  the  other  the  "art"  of  electric  railroading. 
The  "science"  has  to  do  with  all  the  fundamental  details 
which  enter  into  the  present  development  and  includes 
the  work  of  improvements  and  invention,  which  are 
necessary  to  broaden  the  field  of  electric  traction.  This 
includes  developments  in  insulation,  designs  of  gener- 
ating, transmission,  conversion  and  rolling  stock  equip- 
ment parts,  the  solution  of  problems  of  current  collec- 
tion, the  mechanical  structure  of  locomotives  for  high 
speeds,  and  the  many  elements  which  go  to  make  up  a 
successful  and  economical  system  of  control  for  the 
electric  power  from  the  prime  movers  to  the  train 
wheels.  There  are  thousands  of  men  employed  in  the 
development  of  the  science  of  electric  railroading,  and 
it  is  to  these  men  that  we  shall  be  indebted  for  the  final 
victories  of  the  electrification  of  our  railways. 

Art  of  Electric  Railroading. 

The  "art"  of  electric  railroading  includes  the  analysis 
of  conditions  and  the  selection  and  application  of  the 
available  elements  to  a  specific  problem,  as  well  as  the 
operation  and  maintenance  of  the  finished  system. 

It  is  the  problem  of  the  electrical  engineer  to  select 
and  balance  all  the  elements  of  power  generation,  trans- 
mission and  consimaption  in  such  a  manner  as  to  deliver 
the  required  quality  and  quantity  of  transportation 
with  the  greatest  reliability  and  the  lowest  cost. 

As  set  forth,  the  problem  seems  simple,  but  expe- 


ELECTRIC  RAILWAYS.  361 

rience  has  indicated  that  very  different  conclusions  are 
reached,  both  as  to  the  methods  which  should  be  appUed 
and  the  anticipated  results.  The  problem  is,  in  fact, 
extremely  complex;  so  much  so  that  it  is  almost  impos- 
sible to  retain  in  mind  the  many  elements  which  must 
be  simultaneously  considered  to  reach  a  justifiable  con- 
clusion. Frequently  one  sees  results  cited,  which  on 
analysis  are  found  to  disregard  entirely  elements  of  the 
greatest  importance. 

A  better  comprehension  of  the  situation  can  be  ob- 
tained by  outlining  some  of  the  elements  which  must  be 
equated  by  the  electric  railroad  engineer.  We  will  as- 
sume that  the  problem  as  to  schedules,  train  capacities, 
grades,  etc.,  both  for  the  present  and  the  future,  has 
been  accurately  set  forth.  For  conditions  requiring  the 
use  of  motor-car  trains  and  locomotive  operation,  there 
are  available  for  consideration  direct  current  and  sin- 
gle-phase equipments  or  possibly  single-phase  for  the 
motor  cars  and  split-phase  for  the  locomotives,  with  a 
further  possibility  of  three-phase,  if  the  problem  in- 
volves the  use  of  locomotives  only.  To  reach  the  proper 
conclusion,  every  element  from  the  prime  movers  to  the 
train  wheels  must  be  considered. 

Considerations  of  Power  Supply. 

In  some  sections  of  the  coimtry,  in  the  CaroUnas, 
Michigan,  Montana,  Washington,  Oregon,  and  Cali- 
fornia, for  instance,  we  find  networks  of  power  distri- 
bution which  range  from  five  hundred  to  two  or  three 
thousand  miles  of  transmission  circuits  in  each  system. 
Generally  in  such  locahties,  it  is  more  economical  for  a 
railroad  to  buy  than  to  manufacture  its  own  power,  since 


362  *   ELECTRIC  RAILWAYS. 

this  requires  less  capital  expenditure,  and  the  power 
companies  which  have  the  benefit  of  the  factor  of  diversi- 
fied load,  can  generally  manufacture  power  for  less 
cost.  Where  such  conditions  exist  the  frequency  of  the 
primary  distribution  is  established  by  these  systems. 
Where  it  is  necessary  for  the  railway  to  build  its  own 
power  house,  the  question  of  frequency  of  current,  with 
its  bearing  on  the  power  already  available  in  the  terri- 
tory to  be  served  and  the  demands  of  the  particular 
rolling  stock  selected,  must  be  carefully  investigated. 
Comparisons  must  be  made  between  single-phase  and 
three-phase  power  generation,  due  weight  being  given 
to  the  elements  of  initial  cost,  efficiency,  power-factor, 
and  protective  appliances.  Some  of  the  problems,  such 
as  the  desirable  size  of  power-house  units,  their  overload 
capacity,  etc.,  are  common  to  all  systems. 

Selection  of  Distribution  System. 

The  distribution  system  is  the  simplest  element  in  the 
chain,  and  can  generally  be  worked  out  on  its  economic 
merits,  as  regards  the  selection  of  voltage,  size  of  con- 
ductors, and  the  character  of  installation  to  conform  to 
the  distance  of  transmissions  and  permissible  line  reg- 
ulations for  the  various  systems. 

Secondary  Distribution  and  Substations. 

The  location  and  capacity  of  substations  must  be  con- 
sidered jointly  with  the  secondary  power  distributions 
to  the  trains.  This  involves  the  selection  of  voltage ;  the 
determination  of  the  permissible  potential  drops;  pro- 
vision for  the  mitigation  of  inductive  interference  with 
telephones  and  telegraphs  for  the  single-phase  and 
three-phase  systems,  or  the  consideration  of  the  possi- 


ELECTRIC  RAILWAYS.  363 

bility  of  electrolytic  difficulties  in  case  of  the  direct  cur- 
rent, both  for  normal  operation  and  for  conditions  of 
short  circuits;  the  selection  of  third  rail  or  overhead 
trolley;  the  effect  of  atmospheric  conditions  such  as 
Ughtning,  snow  and  sleet;  examination  of  the  reliabiUty 
of  the  elements  chosen,  and  decisions  regarding  the 
amount  of  line  to  be  incapacitated  when  local  repairs 
must  be  made.  The  selection  of  substation  apparatus 
will  be  different  for  each  system  and  will  further  vary 
with  the  frequency  of  power  supply.  The  advisability 
of  using  transformers  or  auto-transformers  with  ques- 
tions of  capacity  and  regulation  must  be  considered  for 
the  alternating-current  systems ;  and  with  direct  current 
there  are  questions  of  the  relative  merits  of  motor- 
generator  sets,  rotary  converters  or  motor  converters, 
with  the  determination  of  their  normal  and  overload 
capacities  and  regulation.  To  make  these  different 
elements  comparable,  the  selection  of  apparatus  must  be 
so  balanced  as  to  yield  the  same  degree  of  insurance  in 
case  of  the  failure  of  individual  elements  or  abnormal 
congestion  of  traffic,  due  to  any  cause. 

Selection  of  Rolling  Stock. 

The  item  of  rolling  stock  is  by  far  the  most  impor- 
tant for  consideration,  as  the  proper  selection  of  these 
elements  is  vital  to  the  success  of  the  system.  Here  the 
engineer  is  at  once  confronted  with  the  consideration  of 
the  inherent  features  and  costs  of  the  various  kinds  of 
apparatus  available;  and  due  consideration  must  be 
given  the  relative  values  of  constant  versus  variable 
speed,  features  involving  the  starting  characteristics, 
efficiency  of  motors,  conversion  devices,   control  and 


364  ELECTRIC  RAILWAYS. 

driving  mechanisms,  effects  of  inherent  characteristics 
on  power-load  factors,  electrical  power-factors,  etc.; 
besides  all  w^hich,  the  desirability  of  regeneration  and 
emergency  braking  require  consideration,  if  mountain 
work  is  involved. 

After  having  determined  the  first  costs  and  rates  of 
depreciation  of  each  of  the  above  elements,  there  remain 
two  important  items  for  consideration.  The  first  is  the 
analysis  of  power  consumption,  which  can  be  carried 
through  with  reasonable  accuracy  for  the  particular  con- 
ditions under  consideration.  The  second  is  the  problem 
of  the  determination  of  the  operating  and  maintenance 
costs,  which  is  more  difficult.  It  is  in  these  elements 
that  the  results  of  practice  are  most  often  lacking,  and 
the  value  of  an  individual  engineer's  judgment  will  de- 
pend on  his  general  experience,  and  on  his  ability  to  de- 
duce from  available  data  information  which  can  be  ap- 
plied, when  properly  modified,  to  meet  the  specific  prob- 
lem in  hand. 

The  Electrical  Engineer's  Problem. 

The  assembly  of  all  these  elements  in  the  order  of 
their  respective  merits  is  the  problem  before  the 
engineer  who  is  called  upon  to  select  a  system  for  a 
particular  application.  It  is  not  surprising  that  differ- 
ent results  are  reached  by  different  investigators,  due 
to  the  different  weights  assigned  to  the  elements  or  to 
difference  in  the  degree  of  optimism  toward  some  of 
the  unproved  features. 

Very  often  it  is  surprising  to  find  how  little  difference 
there  is  in  the  initial  costs  of  the  various  systems,  as 
some  of  the  elements  tend  to  offset  each  other.    For  ex- 


ELECTRIC  RAILWAYS.  365 

ample,  the  high  cost  of  single-phase  rolling  stock  equip- 
ment frequently  offsets  the  greater  cost  of  direct-cur- 
rent substations,  while  the  additional  weight  of  the  sin- 
gle-phase equipments  offsets  the  greater  conversion 
losses  of  the  direct-current  substations,  resulting  in  both 
the  cost  and  power  consumptions  of  the  two  systems 
being  almost  identical.  Consequently  with  a  greater 
quantity  of  rolling  stock,  the  tendency  is  for  the  moder- 
ate voltage  direct-current  systems  to  be  lowest  in  cost 
and  cheapest  to  operate,  while  with  few  rolhng  stock  ele- 
ments the  tendency  is  to  relatively  favor  the  higher 
voltage  systems.  For  suburban  electrifications  a 
moderate  direct-current  voltage  is  generally  the  most 
economical,  while  for  single  track  infrequent  service, 
higher  voltages  are  desirable. 

Standardization  of  Systems. 

A  discussion  of  electric  railway  systems  in  the 
United  States  would  not  be  complete  without  consider- 
ation of  the  standardization  of  systems.  There  is  no 
doubt  that  standard  third-rail  and  overhead  trolley 
clearances  are  necessary  to  avoid  serious  interference 
with  bridge  girders,  station  platforms,  and  various 
structures  existing  along  main  railway  rights  of  way. 

About  nine  years  ago,  the  Germanic  countries,  headed 
by  Prussia,  adopted  certain  arbitrary  standards — that 
all  main  railways  should  be  equipped  with  fifteen  thou- 
sand volt  single-phase  trolleys,  operated  at  sixteen  and 
two-thirds  cycles.  At  that  time  there  was  no  experience 
available  to  justify  such  a  selection,  but  it  was  believed 
by  those  in  power  to  be  desirable  to  have  all  efforts  ex- 
pended  in   one   direction,    and,    furthermore,    it   was 


366  ELECTRIC  RAILWAYS. 

deemed  necessary  for  military  reasons.  Since  then,  it 
has  developed  that  the  limitations  imposed  are  very  ad- 
verse to  economical  motor  car  operation,  that  inductive 
interference  with  telephones  and  telegraphs  under  cer- 
tain conditions  is  extremely  serious,  the  low  frequency 
involves  difficult  mechanical  problems  and  practically 
bars  out  forever  an  economical  design  of  induction  mo- 
tor for  certain  classes  of  service.  These  limitations  have 
aroused  some  dissatisfaction  in  Germany;  the  Italian 
engineers  have  decided  that  three-phase  is  better  suited 
to  their  conditions  and  the  majority  of  engineers  in 
England,  Australia,  Canada,  France  and  Russia  seem 
to  favor  direct  current. 

In  this  country  we  have  done  well  to  avoid  a  limita- 
tion, such  as  an  arbitrary  standard  system  of  electrifica- 
tion would  impose,  since  it  leaves  us  free  to  work  in 
every  direction — whether  it  be  single-phase,  three-phase, 
spUt-phase,  moderate  or  high  voltage  direct  current, 
the  mercury  rectifier  systems,  or  in  any  other  direction 
which  may  be  entirely  unknown  to  us  today.  Arbitrary 
standardization  of  a  system  would  mean  limited  develop- 
ment or  stagnation. 

Electrification  of  railways  is  desirable,  not  only  from 
the  standpoint  of  superior  transportation,  but  on  ac- 
count of  improvement  in  land  values  and  the  comfort 
and  safety  of  travel.  Although  electrification  is  eco- 
nomically justified  for  many  conditions,  there  are  today 
no  known  systems  sufficiently  low  in  cost  to  permit  uni- 
versal use  of  electricity  for  railroads;  and  electrical 
engineers  must  therefore  have  a  free  hand  in  order  to 
achieve  the  ultimate  general  application  of  electricity  to 


ELECTRIC  RAILWAYS.  367 

railway  transportation,  which  it  is  confidently  beheved 
will  come. 

Electrification  of  Puget  Sound  Lines. 

A  notable  example  of  recent  electrification  of  rail- 
roads is  seen  in  the  case  of  the  Puget  Sound  lines  of  the 
Chicago,  Milwaukee  &  St.  Paul  Railway.  Plans  for 
the  initial  electrification  of  the  first  engine  division,  con- 
sisting of  113  miles  of  main  line  in  Montana,  between 
Three  Forks  and  Deer  Lodge,  were  completed  early  in 
1915,  and  contracts  were  let  with  the  General  Electric 
Company  for  electric  locomotives,  substation  appa- 
ratus, and  hne  material,  and  with  the  Montana  Power 
Company  for  the  construction  of  transmission  and  trol- 
ley lines.  This  was  the  first  step  toward  the  electrifica- 
tion of  four  engine  divisions  extending  from  Harlow- 
ton,  Montana,  to  Avery,  Idaho,  a  total  distance  of  ap- 
proximately 440  miles,  with  about  650  miles  of  track, 
including  yards  and  sidings.  It  was  expected  that  the 
electrification  would  be  extended  in  the  near  future 
from  Harlowton  to  the  Coast,  should  the  operating  re- 
sults of  the  initial  installation  prove  as  satisfactory  as 
anticipated. 

The  plans  of  the  Chicago,  Milwaukee  &  St.  Paul 
Railway  are  of  especial  interest,  as  this  is  the  first  at- 
tempt to  install  and  operate  electric  locomotives  on 
tracks  extending  over  several  engine  divisions,  under 
which  conditions  it  is  claimed  the  full  advantage  of  elec- 
trification can  be  secured.  The  various  terminal  and 
tunnel  installations  made  in  the  past  have  been  more  or 
less  necessary  by  reason  of  local  conditions,  but  the  elec- 
trification of  the  Chicago,  Milwaukee  &  St.  Paul  is  un- 


368  ELECTRIC  RAILWAYS. 

dertaken  purely  on  economic  grounds,  with  the  expecta- 
tion that  superior  operating  results  with  electric  loco- 
motives will  effect  a  sufficient  reduction  in  the  present 
cost  of  steam  operation  to  return  an  attractive  percent- 
age on  the  large  investment  required. 

If  the  savings  anticipated  are  realized  in  the  electric 
operation  of  the  Puget  Sound  lines,  this  initial  instal- 
lation will  constitute  one  of  the  most  important  mile- 
stones in  electric  railway  progress,  and  it  should  fore- 
shadow large  future  developments  in  heavy  steam  road 
electrification.  The  success  of  electric  operation  on 
such  a  large  scale  will  at  least  settle  the  engineering  and 
economic  questions  involved  in  making  such  an  instal- 
lation, and  will  limit  the  future  problems  of  electrifica- 
tion to  the  ways  and  means  of  raising  the  required  capi- 
tal to  effect  the  change  in  motive  power. 

New  Type  Electric  Locomotives. 

The  electric  locomotives  manufactured  by  the  Gen- 
eral Electric  Company  for  the  Puget  Sound  lines  are  of 
especial  interest  for  many  reasons.  They  are  the  first 
locomotives  to  be  constructed  for  railroad  service  with 
direct-current  motors  designed  for  so  high  a  potential 
as  3000  volts.  They  weigh  approximately  260  tons  and 
have  a  continuous  capacity  greater  than  any  steam  or 
electric  locomotive  yet  constructed.  Perhaps  the  most 
interesting  part  of  the  equipment  is  the  control,  which  is 
arranged  to  effect  regenerative  electric  braking  on  down 
grades.  This  feature  as  yet  has  never  been  accom- 
plished with  direct-current  motors  on  so  large  a  scale. 

The  total  length  of  each  of  these  electric  locomotives 
is  112  feet.    They  are  equipped  with  eight  motors  and 


ELECTRIC  RAILWAYS.  369 

have  eight  driving  axles.  The  complete  locomotive  has 
a  continuous  H.P.  rating  of  3,000,  a  trailing  load 
capacity  of  2,500  tons  on  a  one-per-cent  grade,  or  1250 
tons  on  a  two-per-cent  grade.  The  approximate  speed 
at  these  loads  and  grades  is  16  miles  per  hour. 

The  freight  and  passenger  locomotives  are  similar  in 
all  respects,  except  that  the  passenger  locomotives  are 
provided  with  a  gear  ratio  permitting  the  operation  of 
800-ton  trailing  passenger  trains  at  approximately  60 
miles  per  hour,  and  are  furthermore  equipped  with  an 
oil-fired  steam-heating  outfit  for  the  trailing  cars.  The 
interchangeability  of  all  electrical  and  mechanical  parts 
of  the  freight  and  passenger  electric  locomotives  is  con- 
sidered to  be  of  very  great  importance  from  the  stand- 
point of  operation  and  maintenance. 

As  the  electric  locomotive  needs  inspection  only  after 
a  run  of  approximately  2,000  miles,  requires  no  stops 
for  taking  on  coal  or  water,  or  layover  due  to  dumping 
ashes,  cleaning  boilers,  or  petty  roundhouse  repairs,  it  is 
expected  that  the  greater  flexibility  of  the  locomotive 
with  these  advantages  will  result  in  considerable  change 
in  the  method  of  handling  trains  now  limited  by  the 
restrictions  of  the  steam  engine. 


370 


ELECTRIC  RAILWAYS. 


CHAPTER  XXIV. 

TRANSPORTATION  BY  AUTOMOBILE. 

As  a  factor  in  the  transportation  of  both  passengers 
and  freight  in  the  United  States,  especially  for  short 
distances,  the  automobile  or  self-propelled  vehicle  has 
taken  an  important  place  since  the  dawn  of  the  twentieth 
century.  Its  development  has  been  indeed  one  of  the 
marvels  of  modern  progress  in  means  of  transportation, 
and  also  in  the  field  of  manufacturing  industry. 

In  little  more  than  twenty  years  the  gasoline,  or  in- 
ternal combustion,  motor  car  has  grown  from  an  in- 
significant object  of  derision — the  "horseless  carriage" 
of  the  late  '90s — to  a  practical  necessity  of  modern  social, 
business  and  industrial  life.  Its  use  for  both  business 
and  pleasure  transportation  has  increased  so  rapidly  as 
to  create  a  new  era.  The  crude  carriage  that  was  a 
curiosity  twenty  years  ago  was  the  beginning  of  the 
greatest  transportation  aid  that  modern  civilization  has 
produced.  It  has  broadened  the  horizon  of  many  mil- 
lions and  has  raised  the  standards  of  living  among  the 
American  people,  since  its  use  is  no  longer  confined  to 
persons  of  wealth,  but  has  been  brought  within  the  reach 
of  the  most  moderate  incomes;  and  the  automobile  in- 
dustry is  today  among  the  most  important  industries  in 
the  United  States,  ranking  after  steel  and  iron  and  cot- 
ton in  the  list  of  our  manufactures. 

371 


372  TRANSPORTATION  BY  AUTOMOBILE. 

As  a  popular  means  of  locomotion  the  automobile 
now  has  no  rival.  The  streets  and  boulevards  of  our 
cities,  the  great  highways  and  rustic  roads  throughout 
the  country,  are  all  fairly  alive  with  motor  cars  of  all 
grades  and  sizes,  from  the  small,  light  car  of  trivial  cost 
to  the  high-powered  touring  car  whose  initial  cost  runs 
well  into  the  thousands.  Between  these  extremes  are  to 
be  found  many  machines  of  medium  cost,  capable  of 
transporting  from  two  to  a  dozen  people  on  their  daily 
trips  to  and  from  business,  or  on  business  or  pleasure 
tours  about  the  country,  at  the  rate  of  speed  of  an  ordi- 
nary railway  train. 

In  the  field  of  trade,  for  local  transportation  of 
merchandise,  retail  deliveries,  etc.,  horse-drawn  vehicles 
are  rapidly  being  replaced  by  motor  trucks  and  wagons. 
Great  factories  for  the  manufacture  of  motor  vehicles 
have  sprung  up,  some  of  these  employing  many  thou- 
sands of  men,  and  enormous  fortunes  have  been  rapidly 
made  in  the  development  of  this  new  industry. 

In  many  localities,  and  among  certain  classes  of  the 
population,  the  automobile  has  practically  revolution- 
ized transportation.  It  has  given  millions  a  new  out- 
look upon  life.  To  the  farmer  and  his  family  it  has 
been  a  decided  boon,  enabling  them  to  have  easier  and 
more  frequent  communication  with  neighboring  markets 
and  centers  of  trade  and  population;  thus  making  the 
life  of  the  farm  and  the  ranch  more  endurable,  and 
probably  having  its  effect  in  checking  the  tide  of  migra- 
tion from  the  country  to  the  cities. 

One  of  the  greatest  benefits  derived  by  the  public 
from  the  increasing  use  of  motor  vehicles  in  town  and 
country  is  found  in  the  improvement  which  it  has  caused 


TRANSPORTATION  BY  AUTOMOBILE.  37S 

in  the  construction  and  maintenance  of  both  urban  and 
rural  highways.  The  development  of  a  good  roads 
movement  all  over  the  country  has  resulted  in  the  build- 
ing of  hundreds  of  miles  of  improved  roads  in  almost 
every  State ;  in  a  marvelous  extension  of  city  boulevard 


The  Pioneer  American  Automobile.    Designed  and  Built  by  Elwood  Haynes  of 

Kokomo,  Ind.    First  run  July  4,  1894.    Now  in  the  Museum  of  the 

Smithsonian  Institution,  Washington,  D.  C. 

— Photx)  by  Courtesy  of  Haynes  Automobile  Co. 

systems,  and  in  a  general  betterment  of  street  pave- 
ments and  public  highways  wherever  the  motor  car  is 
used.  This  movement  has  been  of  inestimable  benefit, 
not  merely  to  the  pleasure  rider  or  tourist,  but  to  the 
agricultural  community  in  every  State  where  the  prev- 
alence of  poor  roads  has  hindered  access  to  markets  by 
making  the  transportation  of  farm  products  difficult, 
tedious,  and  costly. 

The  Automobile  Industry. 
As  the  third  most  important  manufacturing  industry 


374  TRANSPORTATION  BY  AUTOMOBILE. 

in  the  United  States,  the  automobile  industry,  once  re- 
garded with  suspicion  by  conservative  bankers  and  in- 
vestors, has  won  the  approval  and  confidence  of  the  busi- 
ness world.  Its  mushroom  growth  led  for  several  years 
to  reckless  speculation  and  financing  by  manufacturers 
who  were  overwhelmed  by  the  tremendous  sudden 
popularity  of  the  motor  car  and  the  excessive  demand 
for  a  vehicle  that  was  scarcely  developed,  from  an  en- 
gineering standpoint,  as  a  reliable  means  of  transpor- 
tation. Recklessness  of  manufacturing  methods  and 
finance  brought  an  inevitable  result — the  reckless  manu- 
facturers were  forced  out  of  business;  their  bankers 
then  took  hold  to  straighten  out  their  tangled  finances, 
and  with  the  conservative  element  in  the  industry 
brought  it  to  its  present  high  standing. 

From  the  few  rattletrap  cars  that  participated  in  the 
first  automobile  road  race  in  America — ^held  under  the 
auspices  of  the  Chicago  Herald  in  1895 — ^the  business 
has  so  increased  that  the  output  of  motor  vehicles  in  this 
country  during  the  present  year,  1916,  is  estimated  by 
authorities  in  the  trade  at  from  1,000,000  to  1,200,000 
and  the  value  of  this  enormous  product  is  placed  at  not 
far  from  $1,000,000,000. 

There  has  been  an  increase  in  production  by  leaps  and 
bounds  every  year.  The  number  of  cars  turned  out  by 
American  factories  in  1905 — ten  years  after  the  birth  of 
the  industry — was  33,896.  In  1909  the  production  went 
far  above  the  100,000  mark— 125,593. 

Sixty  thousand  more  were  made  in  1910.  In  1911  the 
nmnber  was  209,957;  in  1912  it  jumped  to  378,261;  in 
1913  the  number  approximated  450,000  and  in  1914? 
there  was  an  increase  to  515,000  new  cars. 


TRANSPORTATION  BY  AUTOMOBILE.  375 

The  greatest  jump  in  output  in  any  year,  however, 
was  made  in  1915,  when  842,249  passenger  automobiles 
and  50,369  motor  trucks  were  sold  in  the  United  States. 
The  retail  value  of  this  product  was  stated  by  the  Auto- 
mobile Chamber  of  Commerce  as  $732,600,000. 

The  European  war  was  responsible  for  much  of  the 
motor  truck  manufacture  in   1915-16,   several  truck 


National  Touring  Car— National  Motor  Vehicle  Co.,  Indianapolis. 

manufacturers  filling  large  orders  for  various  sorts  of 
vehicles  ordered  by  the  belligerent  nations.  The  in- 
crease in  passenger  cars,  however,  and  part  of  the  in- 
crease in  motor  truck  manufacture,  were  due  to  the 
rapid  extension  of  the  use  of  automobiles  in  American 
business. 

One  reason  for  this  increase  is  that  with  improved 
engineering  and  manufacturing  processes  and  larger 
production  the  automobile  manufacturers  have  been 
able  to  turn  out  much  better  cars  than  formerly  at  much 
lower  prices.  With  a  great  many  users  the  automobile 
has  passed  beyond  the  luxury  stage  and  become  an  ab- 
solute necessity. 

Exports  of  American  Cars. 
In  the  upbuilding  of  the  industry  in  this  country,  the 


376  TRANSPORTATION  BY  AUTOMOBILE. 

foreign  trade  has  had  an  important  bearing.  In  the 
early  days,  American  cars  did  not  suit  those  of  unHmited 
means,  who  preferred  cars  of  European  make,  and  the 
French  and  German  manufacturers  shipped  many  cars 
to  this  country.  But  now  the  situation  is  different. 
American-made  cars  furnish  everything  that  can  be  de- 
sired by  the  most  fastidious  owner  or  driver ;  the  United 
States  is  exporting  motor  cars  to  nearly  every  country 
on  the  face  of  the  globe,  and  the  value  of  the  cars  im- 
ported is  insignificant  in  comparison  with  the  value  of 
the  exports. 

The  value  of  the  automobiles  imported  by  the  United 
States  in  1906  was  $3,844,000,  and  the  year  after  it  went 
slightly  above  $4,000,000.  In  1909  the  imported  cars 
were  valued  at  only  $2,905,000  and  the  figure  sank 
gradually  to  $620,000  in  1914.  In  1915  it  rose  to  $1,- 
372,412. 

The  export  figures  tell  a  different  story;  they  travel 
an  ascending  line.  From  a  value  of  $948,500  for  the 
cars  shipped  out  of  the  United  States  in  1903  the  figure 
rose  to  $4,890,000  in  1907,  to  $9,548,700  in  1910,  and  to 
$26,574,000  in  1914;  while  for  ten  months  of  1915  the 
value  of  American  automobiles  and  automobile  parts 
exported  was  $85,485,000,  according  to  the  figures  of 
the  Department  of  Commerce.  The  total  for  the  year 
exceeded  $100,000,000. 

England  is  at  present  our  best  buyer  of  automobiles, 
taking  for  the  year  ending  June  30, 1915,  cars  valued  at 
$21,000,000,  including  8,321  pleasure  cars  and  5,306 
trucks.  The  total  value  of  commercial  vehicles  exported 
in  1915  was  approximately  $63,000,000,  and  of  passen- 


TRANSPORTATION  BY  AUTOMOBILE.  377 

gcr  cars  $37,000,000.    Exports  of  cars  and  trucks  per 
month  are  at  the  rate  of  $8,500,000. 

Extent  of  the  Industry. 

The  birth  of  the  automobile  industry  is  usually  dated 
from  1895,  when  it  was  signalized  by  the  first  automo- 
bile race,  over  the  World's  Fair  course  in  Chicago. 
This  race  was  won  by  J.  Frank  Duryea  and  Charles  E. 
Duryea,  in  a  car  of  their  own  make.  There  were  eighty- 
nine  entrants,  but  only  six  started,  while  only  two  fin- 
ished.   The  time  for  fifty-five  miles  was  10  hrs.  28  min. 

Compare  with  this  the  speed  made  in  the  same  vicinity 
in  1915  by  Dario  Resta,  who  averaged  97.5  miles  an 
hour,  and  subsequently  raised  the  record  to  105.4  miles 
an  hour  for  100  miles.  Non-stop  records  too  have 
jumped  recently  from  250  miles  to  500  miles,  new  rac- 
ing track  construction  being  a  contributing  factor  in 
these  remarkable  records  of  speed  and  endurance,  as 
well  as  improved  motors,  mechanism,  and  tires. 

The  total  number  of  cars  in  use  in  the  United  States 
demonstrates  their  importance  as  a  factor  in  transporta- 
tion. On  July  1,  1915,  there  were  registered,  according 
to  state  reports,  a  total  of  2,070,000  motor  vehicles, 
while  the  total  registrations  for  1915  amounted  to 
2,400,000.  The  registrations  in  New  York  state  on 
December  1, 1915,  were  231,713  cars.  Illinois  registered 
nearly  200,000;  Cahfornia  had  160,000;  and  in  the  lead- 
ing ten  grain  states  the  registrations  for  1915  showed  a 
total  of  677,000  cars.  Iowa  leads  the  states  in  per 
capita  ownership,  having  a  total  registration  of  117,407 
cars,  or  one  car  for  every  nineteen  persons. 

Automobile  factories  were  reported  in  34  states  of 


378  TRANSPORTATION  BY  AUTOMOBILE. 

the  Union  on  January  1,  1916,  with  a  total  of  448 
manufacturers  of  passenger  and  commercial  cars.  The 
commercial  vehicle  manufacturers  numbered  257  and 
there  were  27,700  retail  dealers,  garages,  repair  shops 
and  supply  stores.  The  chauffeurs  registered  in  New 
York  state  number  79,899  and  in  Illinois  24,100.  The 
proportion  of  motor  vehicles  to  the  population  of  the 
United  States  was  1  to  48,  and  there  was  one  motor 
vehicle  for  every  mile  of  road  in  the  country,  or  one  car 
to  every  one  and  one-third  square  miles  of  its  entire 
area. 

"While  the  automobile  production  for  1916  is  esti- 
mated at  1,200,000  cars,  some  of  the  manufacturers 
figure  that  there  are  5,000,000  families  in  the  United 
States  with  incomes  permitting  the  ownership  of  a  mo- 
tor car.  The  demand  for  automobiles  therefore  seems 
a  long  way  from  being  filled  and  a  continued  growth  of 
the  industry  may  be  expected. 

Reduction  in  Prices. 

Big  production  of  motor  cars  in  the  United  States 
came  with  the  standardization  of  the  most  important 
parts  of  cars  in  1910,  when  the  number  of  cars  made 
reached  187,000.  Scientific  engineering,  standardiza- 
tion of  parts,  skilled  manufacturing,  big  production,  and 
efficient  selling  brought  the  passenger  car  to  an  average 
price  in  1915  of  $672.  The  most  popular  low-priced  car 
was  marketed  at  about  half  that  price,  and  had  an 
enormous  sale  which  caused  the  authorized  capital  of  the 
manufacturer  to  be  increased  in  1915  from  $2,000,000 
to  $50,000,000,  the  new  stock  going  to  the  holders  of  the 
old  shares  as  a  bonus. 


TRANSPORTATION  BY  AUTOMOBILE.  379 

The  average  price  of  automobiles  in  1899  (for  steam 
runabouts)  was  $1,284.  The  average  price  in  1907  went 
to  $2,123.    Since  then  it  has  been  steadily  reduced. 

The  retail  value  of  the  cars  and  trucks  sold  in  1915 
was  $691,778,950,  made  up  as  follows:  Passenger  cars, 
$565,856,450;  motor  trucks,  $125,922,500. 

Freight  carloads  of  automobiles  shipped  by  American 
manufacturers  in  1915  exceeded  200,000. 

There  are  2,273,000  miles  of  public  road  in  the  United 
States,  and  largely  due  to  the  automobile  the  great  sum 
of  $250,000,000  was  spent  on  highway  construction  in 
1915.  Besides  improving  transportation  by  road,  this 
also  resulted  in  a  tremendous  increase  in  real  estate 
values  in  the  localities  affected.  In  some  localities  this 
increase  has  amounted  to  from  100  to  400  per  cent. 

The  number  of  miles  traveled  annually  by  motor 
vehicles  in  this  country,  estimating  an  average  of  5,000 
miles  per  car,  is  no  less  than  12,000,000,000.  The 
amount  of  gasoline  consumed  annually,  at  an  average  of 
400  gallons  per  car,  is  980,000,000  gallons;  while  the 
lubricating  oil  consumed  annually,  averaging  twelve 
gallons  per  car,  is  28,800,000  gallons. 

There  are  12,000,000  tires  used  annually  on  the  motor 
cars  of  the  United  States,  these  being  of  125  different 
brands  and  of  140  types  and  sizes. 

Keen  competition  in  the  automobile  industry  brought 
failure  during  the  last  five  years  to  about  400  manu- 
facturers. 

Regulation  of  Automobiles. 

Automobiles  pay  registration  fees  in  all  states,  and 
personal  property  tax,  in  addition,  in  all  but  four  states. 
Many  states  also  require  and  charge  for  a  driver's  li- 


380  TRANSPORTATION  BY  AUTOMOBILE. 

cense,  while  others  have  a  wheel  tax.  More  than  $7  per 
car  was  paid  in  motor  vehicle  fees  for  registration  in 
1915,  or  a  total  for  the  United  States  exceeding  $14,- 
000,000. 

Laws  and  ordinances  for  the  regulation  of  automo- 
bile traffic  exist  in  the  various  states,  cities,  and  rural 
districts.  These  usually  prescribe  a  limit  of  speed  which 
shall  not  be  exceeded  by  drivers,  under  a  penalty,  and 
also  set  forth  rules  of  the  road  for  motor  vehicles.  The 
speed  limits  vary  according  to  the  nature  of  the  locality 
and  the  spirit  of  the  community.  In  the  larger  cities  ac- 
cidents involving  loss  of  life  to  pedestrians  and  motorists 
are  still  distressingly  frequent,  but  a  recent  tendency 
toward  "safety  first"  is  observable  in  all  populous  cen- 
ters, and  restriction  of  motoring  to  a  reasonable  and 
safe  speed  under  all  conditions  is  now  strongly  urged 
upon  drivers  by  the  automobile  clubs  and  associations, 
as  well  as  by  local  authorities  in  all  parts  of  the  country. 

Features  of  Up-to-Date  Cars. 
The  modern  automobile  of  average  cost  is  lighter, 
better  equipped,  more  beautiful  and  more  comfortable 
than  its  predecessors  in  the  brief  process  of  evolution. 
Nearly  all  manufacturers  now  adhere  closely  to  estab- 
lished principles  of  design,  motors  are  more  reliable,  and 
valves  generally  are  better.  Improved  starting  and 
lighting  systems,  electric  gear  shifts,  etc.,  have  done 
much  to  increase  ease  of  operation  and  the  comfort  of 
drivers.  Most  engines  are  water-cooled,  but  the  air- 
cooled  motor  cars  of  a  great  manufacturer  are  both 
successful  and  popular.  The  "gearless"  car  has  arrived, 
silent  "sliding  sleeve"  motors  are  in  extensive  use,  but 
most  of  the  changes  in  model  now  made  by  manuf actur- 


TRANSPORTATION  BY  AUTOMOBILE.  381 

ers  are  in  the  direction  of  improving  details  of  con- 
struction rather  than  radical  changes  of  design. 

Automobile  engines  are  now  mostly  of  the  four- 
cyhnder  and  six-cylinder  varieties.  About  11  per  cent 
of  the  models  shown  (not  of  cars  manufactured)  in  1916 
were  of  eight-cylinder  design,  and  twelve-cylinder 
engines  appeared  for  the  first  time  in  1916. 

The  average  horse-power  of  the  1916  models  was 
28.66.    In  1915  it  was  29.77. 

The  limit  of  motor  construction  for  the  automobile 
appears  to  have  been  reached,  so  far  as  the  number  of 
cylinders  is  concerned.  Experimental  and  research 
work  has  fully  convinced  American  engineers  that  a 
small-bore,  high-speed  motor  is  to  be, the  final  answer  in 
motor  car  construction.  European  engineers  have  al- 
ready adopted  this  theory.  The  smaller  bore  of  the  cyl- 
inder permits  the  use  of  higher  compression,  and  the 
higher  the  compression  the  more  efficient  is  the  burning 
of  the  gases  at  all  speeds.  Naturally  the  question  arises, 
to  what  extent  can  this  be  carried  out? 

There  are  various  reasons,  according  to  the  experts, 
why  more  than  twelve  cylinders  will  not  be  employed 
in  the  construction  of  automobiles.  The  principal  rea- 
son is  that  the  greatest  efficiency  is  reached  with  this 
motor,  not  only  from  the  engineer's  standpoint  but  from 
the  standpoint  of  the  man  behind  the  wheel. 

Automobile  No  Longer  a  Mystery. 

The  air  of  mystery  which  surrounded  the  automobile 
in  its  early  days  has  been  dissipated  by  the  simplicity  of 
its  operation,  and  increased  knowledge  of  its  construc- 
tion. 

There  is  no  longer  the  impression  in  the  minds  of  buy- 
ers and  users  that  the  motor  car  is  a  complex  combi- 


382  TRANSPORTATION  BY  AUTOMOBILE. 

nation  of  parts  which  only  one  well  versed  in  engineering 
can  safely  own.  And  yet  the  simplicity  of  the  automo- 
bile is  largely  due  to  the  association  of  numerous  smaller 
machines  into  a  harmonious  unit. 

The  motor  car  of  today  resembles  the  original  horse- 
less carriage — which  Elwood  Haynes  placed  upon  an 
Indiana  highway  in  1894 — only  in  the  fact  that  it  is 
motor  driven.  (The  pioneer  Haynes  one-cylinder  ma- 
chine is  now  preserved  in  the  museum  of  the  Smith- 
sonian Institution  at  Washington. )  The  history  of  every 
mechanical  development  has  been  "from  crude  direct- 
ness at  the  start  to  extreme  and  burdensome  complexity; 
then  to  a  finished  simplicity  which  made  the  complex 
designs  seem  absurd."  It  was  logical  that  the  automo- 
bile should  go  through  stages  of  development  in  that 
respect,  following  the  general  rule  of  mechanical  history 
and  working  back  to  a  permanent  condition  of  sim- 
phcity. 

The  question  of  the  number  of  cylinders  for  an  auto- 
mobile engine  will  be  finally  settled  by  the  people  who 
buy  automobiles,  and  their  decision  will  be  properly  in- 
fluenced by  the  cost  of  operation  plus  depreciation.  The 
simpler  any  mechanism,  the  cheaper  it  is  to  operate  and 
care  for.  Therefore  it  would  seem  that  any  tendency  to- 
ward a  large  number  of  cylinders  in  automobile  engines 
is  likely  to  be  followed  by  a  return  to  a  policy  of  fewer 
cylinders,  because  of  this  greater  simplicity  and  the  re- 
sulting economical  advantage. 

Official  figures  show  that  close  to  2,400,000  motor  cars 
were  licensed  in  this  country  in  1915,  and  it  is  conserv- 
atively estimated  that  at  least  one  million  persons  are 
driving  their  own  cars.  Of  these  persons  probably  not 
one  in  ten  knows  much  about  its  mechanism.     Such  a 


TRANSPORTATION  BY  AUTOMOBILE.  383 

condition  is  bound  to  have  an  important  influence  in  the 
future  design  of  motor  cars. 

It  is  a  condition  which  means  a  tendency  toward 
greater  reliability  in  automobiles;  simplicity  in  design 
and  construction — the  smallest  possible  number  of 
things  to  look  after  and  care  for. 

Electric  Vehicles  Popular. 

Recent  changes  and  improvements  in  the  electric 
vehicle  industry  point  to  a  bright  future  for  the  electric 
in  the  commercial  field  and  as  a  passenger  car.  The 
popularity  of  the  electric  car  has  been  of  gradual,  steady 
growth  in  recent  years,  and  it  is  now  firmly  established 
in  public  favor. 

The  electric  motor  car  is  an  especially  desirable  and 
economical  vehicle  for  city  and  suburban  transportation. 
An  important  recent  development  in  a  special  field  is 
its  adoption  for  municipal  service,  in  one  form  or  an- 
other, by  many  of  our  most  progressive  cities.  Still  an- 
other development  seen  in  the  cities  is  the  electrically 
driven  taxicab. 

Increasing  Use  of  Motor  Trucks. 

There  are  now  (1916)  in  use  in  the  United  States 
more  than  200,000  motor  trucks,  or  ten  times  as  many  as 
at  the  beginning  of  1912.  The  present  output  of  Ameri- 
can factories  for  American  use  is  at  least  75,000  trucks 
a  year,  with  a  value  of  $120,000,000;  and  the  demand 
exceeds  the  supply. 

In  the  motor  truck  market  there  is  a  greater  range  of 
models  and  prices  than  there  is  in  the  pleasure  car  field. 
Besides  the  conventional  rear-wheel  driven  types  there 
are  front  drive  and  four-wheel  drive  models,  as  well  as 
the  six- wheel  semi-tractor  and  trailer. 


384  TRANSPORTATION  BY  AUTOMOBILE. 

A  review  of  the  motor-truck  manufacturers  shows 
221  makers  of  gasoline  trucks,  twenty-four  electric 
wagon  concerns,  and  two  making  steam  trucks.  Be- 
tween them  they  list  no  fewer  than  462  different  models 
— 407  gasoline,  fifty-three  electric,  and  two  steam. 

A  significant  sign  that  the  vogue  of  the  motor  truck  is 
country-wide  is  the  fact  that  these  manufacturers  are 
located  in  thirty-one  different  states,  ranging  from 
Massachusetts  to  Texas  in  the  east  and  south,  from 
New  York  to  Minnesota  in  the  north,  and  including 
Washington,  Oregon,  and  CaHfornia  in  the  extreme 
west.  Michigan  leads  with  41  manufacturers  of  trucks, 
while  Ohio  has  31,  Pennsylvania  25,  Illinois  20,  Massa- 
chusetts 13,  Indiana  12  and  Wisconsin  11. 

Motor  truck  buyers  today  pay  less  attention  to  the 
engineering  details  of  the  machine  than  they  do  to  its 
economy  and  efficiency  in  the  particular  kind  of  trans- 
portation for  which  the  truck  is  intended.  The  ability 
of  the  truck  to  deliver  the  goods  the  maximum  number 
of  working  days  under  all  kinds  of  road  and  weather 
conditions — this  is  the  prime  consideration  with  the 
well-informed  buyer,  the  merchant  who  has  to  move 
goods.  When  the  lessons  of  the  European  war  are 
finally  tabulated,  not  the  least  important  will  be  the  part 
played  by  the  motor  truck.  The  dependence  upon 
gasoline  traction  will  be  emphasized  as  never  before,  and 
the  lessons  taught  by  war  will  be  turned  to  account  in 
improved  design  and  construction  of  motor  wagons  and 
trucks  to  serve  the  arts  of  peace. 


QUESTIONS    FOR    REVIEW. 


TRANSPORTATION— INTERSTATE   COMMERCE-^ 
FOREIGN  TRADE. 

CHAPTER  I. 

The  History  of  Transportation. 

1.  Who  first  suggested  the  building  of  a  raikoad, 
and  when? 

2.  What  treatment  did  he  receive? 

3.  When  was  the  first  railway  in    America  con- 
structed? 

4.  What  railroad  was  it  ? 

5.  How  and  when  was  the  present  New  York  Cen- 
tral system  inaugurated? 

6.  In  what  year  was  conmiunication  by  rail  between 
New  York  and  Buffalo  estabhshed? 

7.  What  State  followed  New  York  in  railway  de- 
velopment? 

8.  Who  were  the  builders  of  the  first  American 
locomotives? 

9.  What  part  have  railways  played  in  the  develop- 
ment of  the  coimtry? 

10.  Between  what  years  was  the  greatest  amount  of 
railroad  building  done  in  America? 

11.  What  main  purpose  was  involved  in  the  con- 
struction of  the  first  transcontinental  route? 

I.B.L.  Vol.  8—25  385  A 


886  QUESTIONS   FOR   REVIEW. 

12.  How  did  rates  on  the  pioneer  railroads  compare 
with  those  in  effect  today? 

13.  In  what  time  could  the  journey  from  Philadel- 
phia to  Pittsburg  be  made  by  rail  in  1837? 

CHAPTER  II. 

Organization  of  Operating  Force. 

1.  On  what  plan  is  the  operating  staff  of  a  railroad 
organized? 

2.  Cite  the  system  in  effect  on  the  Union  Pacific. 

3.  Who  is  at  the  head  of  the  operating  staff? 

4.  How  many  departments  report  direct  to  this  offi- 
cial? 

5.  What  are  the  duties  of  a  General  Superintend- 
ent? 

6.  By  what  means  does  he  keep  in  close  touch  with 
the  operation  of  his  road? 

7.  To  what  extent  does  a  Division  Superintendent 
have  authority? 

8.  Is  the  General  Freight  Agent  subordinate  to  the 
General  Manager;  and  if  so,  how? 

9.  What  are  the  duties  of  a  General  Passenger 
Agent? 

CHAPTER  III. 

Relations  of  Carrier  and  Shipper. 

1.  Is  there  any  difference  between  carriers  by  rail 
and  water  as  regards  their  liability  to  shippers? 

2.  Which  carrier  assumes  the  greatest  amount  of 
responsibility? 


QUESTIONS   FOR   REVIEW.  387 

3.  Under  what  conditions  are  railroads  exempt? 

4.  What  must  a  carrier  by  rail  do  to  protect  a  ship- 
per? 

5.  Is  a  railroad  responsible  for  losses  by  fire  while 
goods  are  in  transit? 

6.  When  does  the  liability  of  a  carrier  by  rail  ter- 
minate ? 

7.  What  is  the  difference  between  the  old  and  the 
modern  system  of  forwarding  goods? 

8.  Under  what  conditions  does  responsibility  attach 
to  shippers? 

9.  What  is  the  general  liability  of  a  carrier  by 
water? 

10.  How  is  this  liability  limited? 

11.  Do  the  Federal  statutes  define  the  liability  of 
carriers  by  water? 


CHAPTER  IV. 

What  Is  a  Reasonable  Eate? 

1.  Is  there  any  fixed  plan  by  which  a  reasonable  rate 
may  be  equitably  determined? 

2.  Is  the  basis  of  "a  fair  rate  on  the  capital  invested" 
satisfactory? 

3.  What  difficulties,  if  any,  exist  in  establishing 
the  actual  cost  of  railway  construction? 

4.  Has  any  practical  plan  been  put  into  effect? 

5.  What  is  the  position  of  the  United  States  Supreme 
Court  on  this  subject? 

6.  Can  the  Federal  Supreme  Court  deal  with  the 
legality  of  rates  fixed  by  the  various  States? 


888       .  QUESTIONS   FOR   REVIEW. 

7.  How  would  an  attempt  at  a  rate-reduction  affect 
the  general  rate  schedule? 

8.  Is  the  Constitution  violated  by  making  rates  so 
low  as  to  be  unprofitable? 

CHAPTER  V. 

Domestic  and  Foreign  Kates. 

1.  Is  there  a  tendency  on  the  part  of  railroads  to 
reduce  freight  and  passenger  rates  as  business  increases? 

2.  Cite  the  difference  in  passenger  rates  for  journeys 
of  similar  length  in  the  United  States  and  England. 

3.  Name  the  average  passenger  rates  now  in  effect 
in  the  principal  civilized  countries. 

4.  What  country  has  the  lowest  rate,  irrespective  of 
class  of  service? 

5.  What  is  the  general  tendency  of  freight  rates,  up- 
ward or  dov/nward? 

6.  What  appreciable  effect  would  there  be  in  a  ten 
per  cent  increase  in  freight  charges  ? 

CHAPTER  VI. 

Classification  of  Traffic. 

1.  Why  do  railroads  classify  their  freight  traffic? 

2.  Is  the  plan  now  in  effect  entirely  satisfactory? 

3.  On  what  basis  is  classification  made  ? 

4.  To  what  extent,  if  any,  is  locality  a  factor  in  de- 
termining the  classification  of  freight  ? 

5.  How  are  rates  affected  by  this  classification? 

6.  Name  the  rates  in  effect  on  each  class  between 
New  York  and  Chicago. 

7.  How  is  the  minimum  capacity  of  a  car  fixed 
upon? 


QUESTIONS   FOR   REVIEW.  880 

CHAPTER  VII. 

Uniform  Bill  of  Lading. 

1.  In  what  year  and  under  what  conditions  was  the 
uniform  bill  of  lading  adopted? 

2.  Does  any  particular  advantage  accrue  to  shippers 
under  the  new  system? 

3.  What  was  the  defect,  if  any,  in  the  old  form? 

4.  Name  the  principal  features  of  the  uniform  bill. 

5.  Of  what  particular  advantage  is  it  in  banking 
transactions  ? 

6.  What  liability  does  a  carrier  by  rail  assume  under 
the  uniform  bill  of  lading? 

7.  How  may  shippers  utilize  the  uniform  bill  of 
lading  in  raising  money? 

8.  What  is  a  milled-in-transit  bill,  and  of  what  bene- 
fit is  it  to  a  shipper? 

CHAPTER  VIII. 

Private  Cars  and  Fast  Freights. 

1.  What  class  of  shippers  own  private  freight  cars, 
and  why? 

2.  Under  what  arrangement  do  the  railroads  handle 
these  cars  ? 

3.  What  advantage  is  there  to  a  shipper  in  the  own- 
ership of  freight  cars? 

4.  Do  the  railroads  benefit  by  this  system,  and  if  so, 
how? 

5.  How  did  the  private  car  system  originate? 

6.  What  was  the  beginning  of  the  fast  freight  ser- 
vice? 

7.  How  is  this  service  operated? 


390  QUESTIONS   FOR  REVIEW. 

CHAPTER  IX. 

Some  Transportation  Problems, 

1.  What  is  the  comparative  transportation  power  of 
man,  horse  and  locomotive? 

2.  Which  country  gives  the  best  and  most  economic 
transportation  service? 

3.  Is  there  a  Federal  law  against  discrimination  in 
rates? 

4.  When  did  it  originate,  and  under  what  circum- 
stances? 

5.  What  is  the  effect  of  competition  between  large 
carriers  ? 

6.  Is  there  any  benefit  in  the  combination  system? 

7.  Name  three  plans  that  are  suggested  by  railway 
men  for  obtaining  relief  from  the  effects  of  unrestricted 
competition. 

8.  Can  "pooling"  be  legalized  without  advancing 
rates  unfairly? 

9.  What  benefit,  if  any,  is  there  in  unification  of 
transportation  interests  ? 

10.  What  effect  has  improvement  in  our  railway  ser- 
vice had  upon  rates? 

11.  Cite  some  of  the  objections  which  are  raised 
against  government  ownership. 

12.  Is  there  necessity  for  government  control  which 
does  not  include  government  ownership? 

13.  How  does  England  limit  railway  construction 
so  as  to  avoid  ruinous  competition? 


QUESTIONS   FOR  REVIEW.  391 

CHAPTER  X. 

Railways  as  Industrial  Factors. 

!•  When  did  the  manufacturing  industry  of  Amer- 
ica begin  to  attract  attention? 

2.  What  has  been  the  main  factor  in  the  develop- 
ment of  this  industry? 

3.  Have  railroads  any  interest  in  the  development  of 
communities  and  business  interests? 

4.  How  have  our  American  railroads  operated  to  se- 
cure increase  in  traffic  along  their  lines? 

5.  In  what  way  do  the  immigration  bureaus  of  our 
railroads  assist  in  developing  traffic? 

6.  Why  do  railways  give  particular  attention  to  the 
development  of  manufactures? 

7.  How  are  business  men  located  along  various  rail- 
way lines  educated  to  assist  in  the  development  of  their 
communities? 

8.  Cite  instances  in  which  profitable  industries  have 
been  established  in  the  West  and  Northwest  through 
railroad  influences. 

9.  When  and  how  was  the  first  paper  mill  estab- 
hshed  in  Wisconsin? 

CHAPTER  XI. 

Training  of  Railway  Mechanics. 

1.  What  large  railroad  system  maintains  a  syste- 
matic course  of  instruction  for  its  mechanical  employes? 

2.  Under  what  conditions  are  apprentices  received? 

3.  Of  what  benefit  is  this  system  to  the  road  and 
the  apprentices  it  receives? 


892  QUESTIONS    FOR   REVIEW. 

4.  Give  an  outline  of  the  course  of  instruction,  and 
method  of  rewarding  dihgent  pupils. 

5.  Are  there  any  physical  and  mental  qualifications 
necessary  to  the  acceptance  of  an  apprentice?  If  so, 
name  them. 

6.  What  is  the  advantage  of  the  indenture  system 
as  maintained  by  this  particular  railroad? 

7.  What  is  the  scale  of  wages  paid  to  apprentices? 


CHAPTER  XII, 

Railroad  Situation  in  Canada. 

1.  What  has  Canada  done  toward  the  construction 
of  railroads? 

2.  Is  the  Canadian  policy  liberal  or  otherwise? 

3.  How  much  money  has  Canada  expended  in  the 
construction  of  government-aided  lines  up  to  the  present 
time? 

4.  By  what  other  means  does  the  Canadian  govern- 
ment aid  in  the  construction  of  railroads? 

5.  Which  country  has  the  largest  railway  mileage — 
Canada  or  Great  Britain? 

6.  What  was  the  total  Canadian  railway  mileage  on 
the  1st  of  January  last? 

7.  Cite  an  example  as  to  the  density  of  population 
per  mile  of  railway  in  Canada,  Great  Britain  and  the 
United  States. 

8.  What  is  the  total  capitalization  of  Canadian  rail- 
ways, and  what  does  it  average  per  mile  of  road? 

9.  How  many  passengers  and  how  much  freight  did 
the  Candian  railroads  carry  during  last  year? 


QUESTIONS   FOR  REVIEW.  393 

10.  What  were  the  gross  earnings  of  these  roads 
last  year,  and  how  did  they  compare  with  the  preceding 
year? 

11.  What  were  the  operating  expenses  of  the  roads 
last  year? 

12.  How  many  people  are  employed  in  railway  work 
in  Canada? 

13.  What  is  the  total  amount  of  their  salaries  and 
wages,  and  how  does  the  rate  of  pay  compare  with  that 
prevailing  in  the  United  States? 

CHAPTER  XIII. 

Railway  Mail  Service. 

1.  When  was  carriage  of  mail  first  established  in 
the  United  States? 

2.  What  was  the  speed  per  hour? 

3.  What  is  the  present  highest  speed  of  our  modern 
fast  mail  trains? 

4.  When  was  the  first  special  mail  service  inaugur- 
ated, and  under  what  conditions? 

5.  When,  and  over  what  route,  was  the  first  regular 
mail  service  established? 

6.  What  abuses,  if  any,  existed  in  the  old  distribut- 
ing office  system? 

7.  Who  was  the  original  suggestor  of  the  railway 
postoffice? 

8.  When  and  between  what  points  was  the  distrib- 
uting system  now  in  effect  first  inaugurated? 

9.  Who  introduced  the  fast  mail  train  system,  and 
over  what  roads  were  these  trains  operated? 

10.  What  were  the  results  of  the  first  efforts  to 
establish  this  system? 


894  QUESTIONS   FOR   REVIEW. 

CHAPTER  XIV. 

Transportation  by  Express. 

1.  When,  and  by  whom,  was  the  express  business 
started? 

2.  What  large  companies  have  grown  out  of  the 
eiforts  of  one  man? 

3.  What  are  the  general  terms  of  the  contract  under 
which  express  companies  operate  on  railroads? 

4.  What  is  the  main  source  of  express  revenue? 

5.  How  do  express  companies  regulate  their  charges 
for  the  transportation  of  valuables? 

6.  Is  there  a  limit  to  the  amount  for  which  an 
express  carrier  is  liable?    If  so,  what  is  it? 

7.  Why  is  care  necessary  in  determining  the  value 
of  packages? 

8.  Describe  the  nature  of  what  is  known  as  C.  O.  D. 
business. 

9.  What  makes  this  business  of  special  value  to  the 
express  carrier. 

10.  What  particular  business,  akin  to  banking,  is 
transacted  by  express  companies? 

CHAPTER  XV. 

Railway  Crop  Report  Bureaus. 

1.  What  class  of  railroads  make  a  feature  of  com- 
piling crop  reports? 

2.  In  what  manner  is  the  information  obtained? 
B,    Describe  briefly  the  method  of  compilation. 

4.     What  is  the  purpose  of  securing  and  tabulating 
crop  news? 


QUESTIONS   FOR   REVIEW.  395 

5.  What  classes  of  people  are  benefited  by  this 
service? 

CHAPTER  XVI. 

Fixing  Value  of  Bailroads. 

1.  What  constitutes  the  value  of  a  railroad?  Is  it 
the  cost  of  construction,  or  the  earning  power  of  the 
road? 

2.  What  important  things  should  be  kept  in  mind 
in  determining  railroad  values? 

8.  Name  the  effect  of  railroad  valuation  on  inves- 
tors. 

4.  How  may  fair  valuation  be  made? 

5.  Is  there  any  difference  between  "fair  value"  and 
"cost  of  reproduction"? 

6.  In  what  manner  have  the  Federal  courts  ruled 
upon  the  question  of  railway  valuation?  Cite  an  im- 
portant instance. 

7.  Name  some  of  the  important  items  usually  ig- 
nored in  the  appraisal  of  railroad  property. 

8.  What  is  the  general  policy  of  railroad  managers 
in  the  betterment  of  the  properties  under  their  charge? 

CHAPTER  XVIL 

Interstate  Commerce  Acit. 

1.  In  what  way  does  the  Interstate  Commerce  Act 
afiPect  railway  rates? 

2.  On  what  basis  must  common  carriers  subject  to 
this  act  regulate  their  charges? 

3.  Is  discrimination  in  rates  as  between  shippers 
allowable? 


396  QUESTIONS   FOR   REVIEW. 

4.  Is  there  any  legislation  as  to  long  and  short  haul 
rates?    If  so,  what  is  the  effect? 

5.  How  are  schedules  of  rates  to  be  made  public? 

6.  Must  these  schedules  be  adhered  to? 

7.  To  what  extent  are  carriers  by  rail  liable  for 
damages,  and  how  may  these  damages  be  collected  ? 

8.  What  is  the  punishment  for  violation  of  the  pro- 
visions of  the  Interstate  Commerce  Act? 

9.  Under  what  conditions  are  shippers  liable  to  pun- 
ishment, and  to  what  extent? 

10.  Describe  the  authority  and  powers  of  the  Con*- 
mission. 

11.  In  what  event  may  recourse  be  had  to  the  courts  ? 

12.  How  often  must  common  carriers  by  rail  report 
to  the  Commission,  and  what  should  these  reports  con- 
tain? 

13.  What  courts  have  jurisdiction  of  cases  involv- 
ing violations  of  the  Interstate  Commerce  Act? 

14.  What  provisions,  if  any,  are  there  for  the  use  of 
safety  appliances? 

15.  Does  an  employee,  injured  in  consequence  of  the 
failure  of  a  carrier  to  comply  with  the  law,  lose  his  right 
to  damages  if  he  knowingly  and  willingly  assumes  the 
risk  thus  occasioned? 

16.  What  limitations  are  there  on  Federal  telegraph 
franchises  granted  co  common  carriers? 

17.  What  is  the  duty  of  the  Attorney-General  in 
case  of  violation? 

18.  Must  contracts  between  railroad  and  telegraph 
companies,  relating  to  ownership,  possession,  control, 
use  and  operation  be  filed  with  the  Interstate  Commerce 


QUESTIONS   FOR   REVIEW.  897 

Commission?    What  is  the  penalty  for  failure  to  com- 
ply with  this  provision? 

19.  What  is  the  bearing  of  the  act  in  relation  to 
trusts  and  combinations? 

20.  What  punishment  is  provided  for  engaging  in 
an  illegal  trust  or  combination? 

21.  What  courts  have  jurisdiction  of  such  cases,  and 
to  what  extent? 

22.  Can  a  person  injured  by  an  act  committed  by 
a  common  carrier  in  violation  of  the  terms  of  the  Inter- 
state Commerce  Act  recover  damages  ? 

23.  How  is  the  giving  and  taking  of  bribe  money 
punishable? 

24.  Are  common  carrier  corporations  liable  for  the 
acts  of  their  agents  and  other  employees? 

25.  What  method  of  procedure  is  provided  for  vio- 
lation of  rate  schedules  or  other  acts  of  discrimination? 

CHAPTER  XVIII. 

Transportation  by  Water. 

1.  Give  total  number  of  passengers  carried  on  water 
routes  in  the  United  States  in  one  year. 

2.  What  is  the  general  character  of  freight  transpor- 
tation by  water? 

3.  What  should  be  done  to  improve  our  present  sys- 
tem of  transportation  by  water? 

4.  Give  the  navigable  mileage  of  inland  river  routes 
in  the  United  States. 

5.  Of  canals. 

6.  What  is  the  main  drawback  of  the  American 
canal  system? 


398  QUESTIONS   FOR   REVIEW. 

7.  Describe  the  policy  of  the  Federal  government 
toward  waterways. 

8.  What  is   the  nature   of   Federal   improvement 
work? 

9.  Which  is  the  cheapest  for  the  shipper,  water  or 
rail  transportation? 

10.  How  are  vessels  engaged  for  the  carriage  of 
freight?  ^ 

11.  To  what  extent  does  the  Federal  government 
exercise  control  over  vessels  on  inland  waters  ? 

12.  What  are  the  rates  for  marine  insurance? 

18.    Do  the  various  States  tax  marine  property?    If 
so,  in  what  manner? 

14.  What  constitutes  navigable  water? 

15.  What  is  the  Mississippi  River  problem? 

16.  Name  the  principal  items  and  magnitude  of  lake 
commerce. 

17.  What  are  the  four  principal  Atlantic  ports? 

18.  Give  total  tonnage  of  receipts  and  shipments  at 
the  principal  Atlantic  and  Gulf  ports  for  one  year. 

19.  What  conditions  have  enabled  railroads,  charg- 
ing higher  rates,  to  displace  water  transportation  ? 

20.  Name  the  four  principal  ports  on  the  Pacific 
coast. 

21.  What  commodity  constitutes  the  largest  item  of 
transportation  on  the  Pacific  coast? 

CHAPTER  XIX. 

Lakes-to-the-Gulf  Waterway. 

1.     Is  there  need  for  a  deep  waterway  connecting  the 
great  lakes  with  the  Gulf  of  Mexico? 


QUESTIONS   FOR   REVIEW.  399 

2.  What  section  of  the  United  States  would  be  most 
directly  affected  by  such  a  route  ? 

3.  Give  reasons  why  this  section  is  particularly  inter- 
ested in  such  a  waterway. 

4.  What  benefits  would  be  obtained  by  the  construc- 
tion of  a  great  central  deep  water  route? 

5.  What  class  of  goods  suffer  the  most  from  lack  of 
a  through  deep  water  route? 

6.  To  what  extent  does  waterway  competition  affect 
freight  rates  by  rail? 

7.  What  effect  does  water  and  rail  competition  have 
on  the  bulk  of  business  ? 

8.  How  is  the  producer  limited  as  to  market  area  by 
lack  of  water  transportation? 

9.  How  would  a  lakes-to-the-Gulf  waterwaj^  figure 
in  our  trade  with  Central  and  South  America? 

10.  What  business  relation  would  exist  between  the 
Panama  Canal  and  a  waterway  to  the  Gulf,  provided 
the  latter  were  constructed? 

11.  What  advantage  would  such  a  route  have  over 
that  now  used? 

CHAPTER  XX. 

Vessels  in  Foreign  Trade. 

1.  Why  does  the  Federal  government  keep  a  record 
of  vessels  engaged  in  foreign  trade? 

2.  What  is  the  significance  of  a  "ship's  papers"? 

3.  What  vessels  can  be  registered  in  the  United 
States? 

4.  What  benefit,  if  any,  attaches  to  the  registration 
of  a  vessel? 


400  QUESTIONS   FOR  REVIEW. 

5.  How  is  the  identity  of  a  vessel  established  ? 

6.  Under  what  conditions  may  a  vessel's  name  be 
changed? 

7.  How  is  registry  effected? 

8.  Can  a  foreigner  command  a  vessel  of  American 
registry? 

9.  What  is  "the  husband"  of  a  vessel? 

10.  How  is  the  tonnage  capacity  of  a  vessel  accurate- 
ly decided  upon? 

11.  Describe  the  method  of  measuring  a  vessel. 

12.  Is  there  any  reason  for  the  tonnage  of  a  vessel 
being  accurately  stated?    What  is  it? 

CHAPTER  XXI. 

Work  of  the  Custom  House. 

1.  What  routine  must  be  observed  by  vessels  de- 
parting from  ports  of  clearance? 

2.  Of  what  service  is  the  clearance  paper? 

3.  What  is  a  ship's  manifest,  and  what  should  it  con- 
tain? 

4.  What  course  should  be  taken  by  the  master  of  a 
vessel  on  arriving  at  a  port  of  entry? 

5.  Is  there  any  limit  to  the  time  allowed  for  unload- 
ing vessels  ?    If  so,  what  is  the  rule  ? 

6.  Describe  the  process  of  importing  foreign  goods. 

7.  What  papers  is  it  necessary  for  an  importer  to 
hav  i 

8.  Must  duties  be  paid  immediately  on  inspection  of 
goods? 

9.  If  not  thus  paid,  what  course  may  an  importer 
pursue? 


QUESTIONS   FOR   REVIEW.  401 

10.  In  the  event  of  his  placing  the  goods  in  bond, 
how  long  may  they  remain  there  before  the  duty  must 
be  paid? 

11.  What  is  the  penalty  for  making  false  return  as 
to  valuation  of  goods? 

12.  May  imported  goods  be  re-exported  without 
payment  of  duty? 

CHAPTER  XXII. 

The  Bonded  Warehouse. 

1.  Why  are  bonded  warehouses  established? 

2.  Of  what  benefit  are  they  to  shippers? 

3.  What  kind  of  goods  are  placed  in  bond  ? 

4.  How  is  a  warehouse  entry  made? 

5.  Of  what  particular  value  is  a  warehouse  receipt? 

6.  Is  there  a  punishment  for  wrong  valuation?    If 
so,  what  is  it? 

7.  What  is  the  duty  on  imported  goods  in  bond 
which  are  withdrawn  for  re-exportation? 

8.  How  are  such  goods  kept  track  of  after  being  re- 
shipped? 

9.  What  is  the  rate  of  storage  charges? 

CHAPTER  XXIII. 

Electric  Railways  of  the  U.  S. 

1.  How  many  miles  of  electric  railways  are  there  in 
the  United  States? 

2.  From  what  year  does  their  period  of  development 
date. 

I.  B.  L.  Vol.  8—26 


402  QUESTIONS   FOR  BEVIEW. 

3.  How  many  passengers  did  the  electric  railways 
transport  last  year  ? 

4.  How  does  the  competition  of  electric  railways 
aflfect  the  steam  roads? 

5.  What  are  the  prospects  for  general  electrification 
of  the  steam  railroads? 

6.  What  are  the  chief  characteristics,  etc.,  of  an 
electric  locomotive? 

7.  What  steam  railroad  was  the  first  to  electrify  a 
large  portion  of  its  mileage,  and  what  was  the  result  of 
the  experiment? 

8.  Name  some  of  the  engineering  problems  in  equip- 
ping an  electric  road. 

9.  What  type  of  passenger  car  is  generally  used  in 
city  traffic? 

10.  What  type  of  car  is  best  fitted  for  interurban 
service? 

11.  How  do  the  electric  railways  of  the  United 
States  compare  with  foreign  systems  ? 

CHAPTER  XXIV. 

The  Automobile  in  Transportation. 

1.  How  many  licensed  automobiles  are  there  in  the 
State  you  live  in? 

2.  About  how  many  people  are  using  automobiles 
daily  in  the  United  States? 

3.  How  has  this  diversion  of  traffic  to  automobiles 
affected  railroad  and  steamboat  lines? 

4.  To  what  extent  has  the  automobile  become  more 
than  a  pleasure  vehicle? 

5.  Has  it  received  any  attention  from  business  men 
as  a  vehicle  for  freight  transportation? 


QUESTIONS   FOR   REVIEW.  408 

6.  Cite  average  cost  per  ton  per  mile  of  operating 
a  two-ton  gasolene  freight  truck. 

7.  What  is  the  average  efficiency  of  a  gasolene 
motor  truck,  as  compared  with  horses? 

8.  What  will  be  the  difference  in  the  daily  cost  of 
feed  for  four  horses,  and  fuel  for  a  gasolene  truck  of 
four-horse  capacity? 

9.  How  many  automobiles  were  made  in  the  United 
States  last  year  ? 


Mitchell  6-CyIinder  7-Passenger  48  H.  P.  Motor  Car. 
Mitchell-Lewis  Motor  Co.,  Racine,  Wis. 


Detroit  Electric  Car-I9i6  Model-Anderson  Electric  Car  Co..  Detroit,  Mich. 


The  Galloway  Automobile — A  Low-priced  Car  Introduced  in  1915  by 
The  William  Galloway  Co.,  Waterloo,  Iowa. 


Hudson  Six — 40  H.  P.  Phaeton— Hudson  ISotor  Car  Co.,  Detroit,  Mich. 


Moon  Six-Cylinder,  40  H.  P.  Motor  Car,  1916  Model. 


Case  40-1916~Model  T  Touring  Car-J.  I.  Case  T.  M.  Co.-Racine,  Wis. 


Maxwell  Touring  Car— MaxweU  Motor  Co.,  Detroit,  Mich. 


TERMS  USED  IN  TRANSPORTATION. 


Barge — Water  craft  which  has  no  means  of  propul- 
sion within  itself  and  must  be  towed.  A  very  consider- 
able business  is  done  by  barges,  especially  on  rivers  like 
the  Ohio,  Missouri  and  Mississippi. 

Bulk  Freight — Commodities  like  grain,  iron  ore, 
coal,  etc.,  which  are  carried  in  bulk  without  being  put  up 
in  containers. 

Canal — An  artificial  waterway.  Generally  a  route 
constructed  to  either  lessen  the  distance  between  cer- 
tain points  or  to  afford  water  connection  where  none 
previously  existed. 

Cargo  Insurance — This  is  generally  paid  for  by  the 
shipper  of  goods,  and  always  so  if  the  vessel  is  under 
charter. 

Channel — The  deepest  part  of  a  navigable  body  of 
water. 

Charter — A  contract  by  which  the  exclusive  use  of 
a  vessel  is  secured  for  a  certain  purpose. 

Classification — Division  of  freight  into  classes  so 
as  to  secure  equitable  rates  according  to  the  nature  of 
the  goods.  The  cheaper  the  goods  the  lower  will  be 
the  classification,  with  a  corresponding  reduction  in  the 
freight  rate. 

C.  O.  D. — A  shipment  of  goods  to  be  paid  for  on 
delivery. 

407 


408        TERMS  USED  IN  TRANSPORTATION. 

Common  Carrier — A  corporation,  firm  or  individual 
engaged  in  the  transportation  of  people  or  goods  for 
the  benefit  of  the  general  pubhc. 

Commutation — A  process  by  which  the  patron  of  a 
transportation  line  by  agreeing  to  use  a  stipulated 
amount  of  mileage  within  a  given  time  secures  a  rate 
much  lower  than  the  ordinary  one-ride  charge. 

Community  or  Interest — Unification  of  transpor- 
tation lines,  either  by  general  ownership,  or  consolida- 
tion of  management,  with  the  purpose  of  eliminating 
disastrous  competition. 

Consignee — The  party  to  whom  goods  are  addressed. 

Consignor — The  party  who  delivers  goods  to  a  trans- 
portation line  to  be  forwarded  to  another  party. 

Demurrage — Compensation  paid  by  transportation 
lines  to  shippers  for  the  delay  or  detention  of  goods. 
Likewise  compensation  paid  by  shippers  to  transporta- 
tion lines  for  the  detention  of  cars  or  vessels. 

Differential  Rates — Special  rates  made  for  hauls  of 
approximately  the  same  distance  with  the  purpose  of 
diverting  traffic  to  or  from  certain  points. 

Differential  Routes — An  advantage  in  rates  al- 
lowed to  certain  roads  which,  by  reason  of  longer  route, 
poor  roadbed  or  equipment,  or  other  cause,  are  unable 
to  compete  with  the  first-class  lines  on  even  terms. 

Drawback — Refund  of  duties  on  goods  which  are 
to  be  exported,  or  of  excess  freight  charges. 

Drawbar — That  part  of  a  locomotive  or  railway  car 
to  which  the  coupling  is  fastened.  A  standard  height  for 
drawbars  is  established  by  law  in  order  to  minimize  the 
risk  of  accident. 


TERMS  USED  IN  TRANS  PORT  ATIOxX.  409 

Dunnage — Frequently  used  to  denote  the  luggage 
or  baggage  of  employees  and  passengers.  More  prop- 
erly the  packing  used  to  keep  a  cargo  in  place  while 
in  transit. 

Gauge — Width  of  track.  There  are  three  gauges  in 
use  in  the  United  States  and  Canada — the  narrow,  broad 
and  standard.  The  latter,  which  is  in  almost  universal 
use,  is  4  feet  8^2  inches  wide.  This  allows  of  an  inter- 
change of  cars  by  all  roads  except  those  of  broad  and 
narrow  gauge. 

Head-on  Collision— When  two  trains,  moving  in 
opposite  directions,  collide,  the  front  or  "head"  end  of 
each  engine  meeting. 

Hull  Insurance — Insurance  on  the  hull  of  a  vessel. 
This  is  taken  out  by  the  owners  of  the  vessel. 

Husband  or  a  Vessel — The  managing  owner  or  con- 
troller of  the  largest  ownership  share. 

Interstate  Commerce — Goods  passing  from  one 
State  to  another.  Traffic  wholly  within  the  boundaries 
of  a  State  is  not  affected  by  interstate  commerce  regu- 
lations ;  but  if  this  traffic  crosses  the  State  boundary  by 
the  fraction  of  a  foot  the  interstate  commerce  regula- 
tions apply. 

Joint  Rate — Rate  made  on  through  shipments  by 
two  or  more  roads,  movement  over  each  of  which  is 
necessary  to  complete  the  journey. 

Manifest — Invoice  of  a  cargo  of  goods  to  be  shown 
at  the  custom  house. 

Mileage — The  basis  on  which  all  fares  and  freights 
are  computed. 

Milled-in-Transit — Arrangement  by  which  grain 
may  be  stopped  in  transit  and  ground,  and  then  re- 


410  T^RMS  USED  IN  TRANSPORTATION.  ' 

shipped  at  the  rate  prevailing  between  the  points  of 
original  shipment  and  ultimate  destination. 

Minimum  Capacity — Minimmn  of  load  capacity  for 
which  the  use  of  a  railway  car  may  be  obtained.  If  a 
shipper  desires  the  exclusive  use  of  a  car  he  must  pay 
freight  on  the  minimum  load  capacity,  even  though  he 
does  not  use  that  minimum  capacity. 

Naval  Stores — Turpentine,  pitch,  resin,  etc.  So 
called  because  in  the  days  of  wooden  hull  vessels  the 
greatest  use  for  these  materials  was  in  ship  building  and 
repairing. 

Navigable  Water — Any  stream  or  body  of  water  on 
which  traffic  incident  to  that  particular  locality  may  be 
conducted.  There  is  no  standard  of  depth,  width  or 
capacity.  In  some  instances  streams  on  which  logs  could 
be  floated  have  been  declared  navigable  waters  because 
logging  was  the  chief  industry  on  the  stream. 

NoN-CoMPETiTiVE  PoiNT — Poiuts  which  can  be 
reached  by  only  one  route.  If  more  than  one  transpor- 
tation line  reaches  the  same  place  it  is  designated  as  a 
competitive  point. 

Package  Freight — Commodities  like  flour,  sugar, 
fish,  etc.,  which  are  put  up  in  containers  like  barrels, 
boxes  or  bags. 

Physical  Property — Actual,  tangible  effects  like 
vessels,  locomotives,  railway  cars,  buildings,  machinery, 
roadbed,  etc.  The  right-of-way  and  good  will  of  a 
railway  may  be  of  more  actual  value  than  its  physical 
property,  but  they  do  not  count  as  such. 

Port  of  Entry — Seaport  at  which  a  customs  service 
is  maintained  for  the  purpose  of  expediting  the  collection 
of  duties  on  imported  goods. 


TERMS  USED  IN  TRANSPORTATION.        411 

Port  of  Clearance — Seaport  from  which  a  vessel 
"clears,"  or  starts  on  its  voyage. 

Propeller — Vessel,  the  motive  power  of  which  is  fur- 
nished by  a  propeller  or  "screw"  at  the  stern.  Now  in 
almost  exclusive  use  on  deep  waters. 

Rear-End  Collision — When  two  trains  moving  in 
the  same  direction  collide,  the  engine  of  one  train  run- 
ning into  the  rear  coach  of  the  preceding  train. 

Registry — Official  record  by  the  government  (all 
civilized  countries),  giving  a  complete  description  of  a 
vessel  for  identification  purposes. 

Revenue — The  money  earned  in  the  transportation 
of  goods  or  passengers.  Also  used  to  designate  the 
income  from  investments. 

Right  of  Way — Term  used  by  train  dispatchers  to 
give  certain  trains  precedence  over  others  when  not  run- 
ning on  a  regular  time  schedule.  Also  used  in  construc- 
tion work  to  designate  the  territory  or  land  secured  by 
a  railway  for  roadbed  purposes. 

Salvage — Goods  saved  from  loss  or  damage  in  rail- 
way or  marine  disasters. 

Side- Wheeler — Vessel  with  propelling  wheels  on 
the  side.  A  type  now  fast  disappearing  because  the 
more  modern  propeller  or  screw  craft  is  easier  and  more 
economical  to  operate. 

Stern-Wheeler — Form  of  boat  used  on  shallow 
streams  of  tortuous  current,  like  the  Mississippi.  The 
motive  power  is  obtained  from  a  large  wheel  at  the  stern 
of  the  craft. 

Switchback — A  system  of  zig-zag  tracks  so  arranged 
that  by  running  forward  and  backward  alternately  a 
train  is  enabled  to  climb  an  otherwise  insurmountable 
grade. 


412        TERMS  USED  IN  TRANSPORTATION. 

Tariff — A  schedule  of  charges  for  the  transportation 
of  goods  or  people.  In  the  freight  line  there  is  generally 
a  special  tariff  for  every  commodity  in  the  movement 
of  which  there  is  an  unusually  large  business. 

Telescoping — When  trains  or  engines  meet  in  col- 
lision and  are  forced  through,  or  partly  through,  one  an- 
other. 

Terminals — The  ends  or  extremities  of  a  transpor- 
tation line.  New  York  and  Buffalo  are  the  terminals 
of  the  New  York  Central  road. 

Through  Freight — Goods  bound  to  the  terminal  of 
a  transportation  line.  Goods  shipped  by  the  Michigan 
Central  from  Chicago  to  Buffalo  would  be  through 
freight  because  Buffalo  is  a  terminal  of  the  road.  The 
same  goods  shipped  to  Buffalo  over  a  road  running 
through  to  New  York  would  be  way  or  local  freight. 

Toll — Charge  made  for  the  use  of  canals.  The 
amount  is  regulated  by  the  tonnage  of  the  vessel. 

Tonnage — Generally  used  to  designate  the  cargo 
capacity  of  vessels.  Also  used  to  designate  their  size. 
There  is  a  great  difference  in  displacement  and  tonnage 
capacity.  A  vessel  of  3,000  tons  size  or  displacement, 
may  not  have  a  cargo  capacity  of  2,000  tons.  It  depends 
upon  the  style  of  interior  construction.  Tonnage  is 
also  employed  by  railway  men  in  expressing  the  amount 
of  freight  hauled.  The  usual  expression  is,  "The  ton- 
nage in  February  was  10,695." 

Train  Dispatcher — The  official  who  sends  out  trains 
and  directs  their  movements  while  in  transit. 

Train  Mileage — The  mileage  travelled  by  train  in 
contradistinction  to  car  mileage.    Thus  a  train  of  ten 


TEEMS  USED  IN  TRANSPOETATION.        418 

cars  would  have  a  mileage  ten  times  greater  than  one 
car  travelling  the  same  distance. 

Train  Orders — Instructions  by  wire  for  the  move- 
ment of  trains.  These  are  invariably  issued  by  the  train 
dispatcher. 

Train  Schedule — The  time  card  by  which  the  move- 
ment of  trains  is  governed. 

Traffic — Goods  or  passengers  carried  by  a  transpor- 
tation Hne.  Thus,  if  an  unusually  large  amount  of  corn 
(or  other  grain),  is  being  shipped  it  is  customary  to 
speak  of  it  as  a  heavy  corn  traffic. 

Transshipment — Reshipment  from  one  carrier  to 
another.  Goods  bound  from  Chicago  to  Liverpool  are 
transshipped  from  car  to  vessel  at  New  York,  or  some 
other  Atlantic  seaport. 

Trunk  Lines — The  great  main  railway  systems 
which,  with  their  branches  and  auxiliaries,  are  in  posi- 
tion to  be  operated  successfully  without  depending  upon 
other  lines.  Such  systems  as  the  New  York  Central,  the 
Pennsylvania,  Union  Pacific,  Santa  Fe,  Baltimore  & 
Ohio,  Erie  and  Illinois  Central  are  trunk  lines. 

Water- and-Rail  Route — A  combination  of  rail  and 
water  transportation.  The  Lackawanna  railway,  for 
instance,  is  a  water-and-rail  line.  It  carries  bulk  cargoes 
like  grain  from  Chicago  to  Buffalo  by  lake  steamer,  and 
at  Buffalo  transfers  the  cargoes  to  trains  bound  for  tide- 
water. 

Wharfage — ^Fee  charged  at  most  ports  for  the  use 
of  a  dock  or  wharf.  Some  cities,  in  order  to  encourage 
the  shipping  industry,  give  free  wharfage,  but  in  most 
instances  the  use  of  docks  must  be  paid  for. 


"Remember  that  man's  life  lies  all  within  this  present, 
as  it  were  but  a  hair's-breadth  of  time;  as  for  the  rest, 
the  past  is  gone,  the  future  yet  unseen.  Short,  therefore, 
is  man's  life,  and  narrow  is  the  corner  of  the  earth  where- 
in he  dwells." — Marcus  Aurelius, 


"There  is  no  man  so  good  who,  were  he  to  submit  all 
his  thoughts  and  actions  to  the  laws,  would  not  deserve 
hanging  ten  times  in  his  life." — Montaigne. 


^ 


14  DAY  USE 

RBTX^N  TO  DESK  FROM  WHICH  BORROWED 
LOAN  DEPT 


8  likr'62LU 


(6889sl0)476B 


.General  Library 

University  of  Californi 

Berkeley 


yp  137^4 


